Question

Differentiate between land and capital as factors of production.

Answer 1

Answer:

In economics, capital refers to that of wealth which is used for further production of wealth. Land is the natural factor of production, it is permanent in nature. Capital is a man made factor of production. It lacks permanency

Explanation:

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Answer 2

Answer:

1. land is natural resource and capital is money

2 land is the first requirement whereas capital is the third

3 land is fixed and capital is important for production

Although land can be said to be a form of capital, the major differences between the two are:

1. Land is a purely natural resource whereas capital comprises anything which has value. Ex. - money, gold, machinery etc.

2. Whereas land is a fixed resource, there is no limit to the amount of capital that can be raised.

3. Land is a primary factor of production meaning it is absolutely necessary for production whereas capital is a secondary factor of production.

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