A Explain the following statement Capital is a lasting but passive factor of production
Answers
Answer:
As a factor of production, capital refers to the purchase of goods made with money in production. For example, a tractor purchased for farming is capital. Along the same lines, desks and chairs used in an office are also capital. It is important to distinguish personal and private capital in factors of production.
Features of Capital
Capital is a passive factor of production. It needs labour to be productive.
Capital is variable in nature. It increases and decreases according to the needs of the firm
Among all the other factors of production, capital is the most mobile. Transportation of capital is an easy activity
Also capital is destructible in nature. It’s not permanent like land. For example, a machine will wear and tear and may even completely break down with time.