Question

write any two differences between land and capital as factors of production​

Answer 1

Answer:

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Explanation:

$1. land is natural resource and capital is money</p><p>2 land is the first requirement whereas capital is the third</p><p>3 land is fixed and capital is important for production</p><p>Although land can be said to be a form of capital, the major differences between the two are:</p><p></p><p>1. Land is a purely natural resource whereas capital comprises anything which has value. Ex. - money, gold, machinery etc.</p><p>2. Whereas land is a fixed resource, there is no limit to the amount of capital that can be raised.</p><p>3. Land is a primary factor of production meaning it is absolutely necessary for production whereas capital is a secondary factor of production.$

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Answer 2

Answer:

1) Both differ in their nature. Land is considered a free gift of nature. No one produced it. No cost is involved for its creation. On the other hand, capital is not a free gift of nature. It is man made.

2) Land has no cost of production. But capital involves some expenditure.

3) Land and capital differ in their availability. While land is inelastic and unchangeable in supply, capital is elastic and changeable. The supply curve of land is inelastic. It is vertical to OX axis. On the other hand, the supply of capital is elastic. Its supply can either be increased or decreased as per the needs of the country.

4) Both differ in their continuity. While land is permanent and indestructible, capital has no such permanent existence. After some period it loses its form and existence.

5) Both also differ in their remuneration. The remuneration paid to land for its utilization is described as rent. On the other hand, the remuneration paid for the utilization of capital is known as interest.