Factors Of Production
👉 Those resources which are used by the producer to produce goods and services are known as factors of production.
The factors of production are listed below.
1) Land
2) Labour
3) Capital
4) Organization or Entrepreneur
# LAND
👉 All the free gifts of nature for human beings are known as "Land" in terms of Economics. For example: air, water, soil, forest, minerals, etc.
* Characteristics Of Land
1) Free Gift of Nature
👉 Land cannot be produced by man. It is produced by nature for free and its price depends upon fertility or productivity of land.
2) Passive Factor
👉 Land is passive factor of production which means that they should be operated by someone else for the production of goods and services.
3) Immobile Factor
👉 Land cannot be moved from one place to another. Its location is permanent, so it is known as immobile factor of production.
4) Fixed in Supply
👉 Land is fixed in supply which means that its supply cannot be extended according to its need. The quantity of land is always constant.
5) Indestructible
👉 Land cannot be destroyable. Humans can only destroy the quality of land but not its quantity. Even if quality of land is destructed by human efforts but its total quantity always remains the same.
6) Differs in Quality
👉 Land differs in quality which means the quality of land differs from place to place and time to time. For example, quality of land of Kathmandu is better than the quality of land of Mustang.
# Labour
👉All the human efforts (including both mental and physical effort) required for the production of goods and services is known as "Labour" in terms of economics.
* Characteristics Of Labour
1) Inseparable
👉 Labour is inseparable which means that the skill of a person cannot be separated from him/her and transferred to a different place or work. For example, teachers cannot perform teaching activities by sending their knowledge to schools/colleges.
2) Active Factor
👉 Labour is active factor of production which means that they should not be operated by someone else for the production of goods and services.
3) Mobile Factor
👉 Labour can be moved from one place to another. Its location is non-permanent, so it is known as mobile factor of production.
4) Perishable
👉 Labour of a person cannot be stored like other factors of production such as capital, raw materials, etc. for future use. A day lost without work means the day's work is gone forever. So, labor cannot be stored for future use.
5) Differs in Efficiency
👉 Efficiency differs from person to person. A person can produce more goods or services than another person at the same time due to their efficiency. Efficiency of labor differs due to knowledge, skills, training, environment, etc.
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