What are 7 importance of labor in factors of production
Answers
Answer:
Labour is the efforts exerted to produce any goods or services. It includes all types of human efforts – physical exertion, mental exercise, use of intellect, etc.
1. Perishable in Nature
Labour is perishable in nature. If a worker does not turn up to work for one shift his labour of that shift is lost completely. It cannot be stored and utilized the next day.
2. Labour is Inseparable from the Labourer
This means the physical presence of the laborer is compulsory. For example we cannot expect a welder to do his work from home, he has to present at the site of the work.
3. Labour is Heterogeneous
We cannot expect labour to be uniform. Every laborer is unique and so his labour power will also differ from the others.
4. Not Easily Mobile
Labour as a factor of production is mobile, i.e. the laborers can relocate to the site of work. But there are many barriers to the movement of labour from one place to another.
5. Supply of Labour is relatively Inelastic
At any given point in time, the supply of labour in the market is inelastic. It cannot be increased instantly to keep up with the demand.
6. Human Effort
Labour is a unique factor of production in comparison with others. It is directly related to human effort, unlike the others.
7. Labour has Poor Bargaining Power
Labour as a factor of production has a very week bargaining power with the buyer of the services. It cannot be stored, isn’t very mobile and has no standard or reserve price.