Question

a. With reference to land as a factor of production:
i. Why is it considered a 'passive' and an 'indestructible' factor of production?
ii. Mention two ways in which land is different from capital.
iii. Discuss two important functions of land.

Answer 1

Land is a natural gift which is one of the factors of production. In economic sense it is just not the surface of land but includes everything it provides.

Land is passive because it itself cannot produce anything but the labour is required to make use of it.
Land is indestructible because it can never be out of use.
Land is mobile and non-variable unlike capital.

Functions of land:

It is an important factor of production because in every aspect we use land for production process.

It provides place for establishing factory.

It provides raw material for production process.

It is the main factor on which entire agriculture depends which is a primary step of production.