Question

Distinguish between the following:

1. Land and capital

2. Fixed capital and variable capital

3. Insurable risk and non-insurable risk

4. Labour and entrepreneur

Answer 1

1.

Land	Capital
Land broadly refers to all the natural resources, flora and fauna, earth, buildings, avenues, air, water, minerals etc.	Capital includes money invested in the business, machinery and tools.
It has inelastic supply.	It has elastic supply.
The factor payment received on land is rent.	The factor payment received on capital is interest.

2.

Fixed capital	Variable capital
It refers to the capital that can be used in the process of production repeatedly.	It refers to the capital that varies throughout the process of production.
It includes machinery, factory, furniture etc.	It includes raw materials, fuel, power etc.
It is durable.	It is not durable.

3.

Insurable risk	Non-insurable risk
It refers to the risk that is insured by various insurance companies.	It refers to the risk that is not insured by any insurance company.
This includes risks against fire, risks against sea perils etc.	This includes risks arising out of changes in government policies, changes in the demand for a product etc.

4.

Labour	Entrepreneur
It refers to the exertion by the human body and mind, with the objective of earning a living.	It refers to the person who undertakes the task of production. He organises the activities, controls the activities related to production and distribution, and bears the risk of failure of the business.
They receive wages in return for their services.	They receive profits in return for their services.