Question

Mention two important characteristics of capital as a factor of production.

Answer 1

Two important characteristics of capital as a factor of production are:A) Capital is a produced means of production: The composition or supply of capital is not automatic, but it is produced with the joint efforts of labour and land. Therefore, capital is a produced means of production.

B) Capital depreciates: As we go on using capital, the value of capital goes on depreciating. When machines are used continuously for some time, these depreciate and their value falls.