Question

State whether the following statement are TRUE and FALSE.

1. Demand for labour is direct demand.

2. Labour and labourer are inseparable.

3. Labour cannot be stored.

4. Capital is a natural factor of production.

5. Land is a free gift of nature.

Answer 1

1) Demand for labour is direct demand. False

Explanation:
No, it is not correct. Demand for labour is not direct demand, rather, it is a derived demand. This is because,labour is demanded in the production process to produce goods and services which are further sold in the market. In this way demand for labour is dependent on the demand for the goods and services in the production of which it will be used.

2) Labour and labourer are inseparable. – True

Explanation:
The above statement is correct. The physical or mental effort exerted by the human body and mind, with the sole objective of earning a living, is known as labour. On the other hand, the person who exerts the physical or mental effort is referred to as the labourer. In this regard, labourer contains labour. Thus, we can say that both the labour and the labourer are inseparable from each other.

3) Labour cannot be stored. - True
Explanation:
Labour includes all the physical and mental efforts of workers. In other words, it is the exertion by the human body and mind with the objective of earning a living. Since we cannot store the mental and physical efforts of workers, we can conclude that labour cannot be stored and used in the future.

4) Capital is a natural factor of production. – False

Explanation:
The above statement is incorrect. Capital includes money invested in the business, machinery and tools which are produced and invested in by the human beings. Unlike land, capital is not a natural factor of production. It is not a gift of nature. Rather, it is a man-made factor of production. Thus, capital is regarded as an artificial factor of production.

5) Land is a free gift of nature. – True

Explanation:
The above statement is true. Land is a free gift of nature as it is not created by mankind. All the natural resources, flora and fauna, earth, buildings, avenues, air, water, minerals etc. are available to human beings as free gifts of nature.