Land Describe
Land: A basic means of production, ‘land’ means in economics; this area includes agricultural land, pastures, forests, urban areas, all minerals and mines, mountains, rivers, beaches, waterfalls, and all natural products that are subject to human and beneficial ownership. happens Natural means of production contained in nature are not labor-intensive. The term land refers to agricultural land.
The quality of land is determined by its fertility. The fertility of the soil is due to its inherent qualities, but its fertility is increased if the soil is cultivated carefully and skillfully by human labor by tying the soil, applying fertilizers, and using good seeds. Many times, a distinction has to be made between the original fertility of the land and the increase in fertility caused by human labor in the yield of agricultural land. Because the fertility of land can be increased by using human labor, capital, or a combination of factors of production.
Features : (1) Aggregate supply of land is constant and finite. Since land is a gift of nature, its cost of production is zero. No amount of human labor can create even a small piece of land. The total area of land is constant and limited.
(2) Another characteristic is the variation in the productive capacity (fertility) of the land, viz. Some soils are more fertile, some are less fertile. Different lands also differ in terms of location. Some are near the market, some are far from the market. The distance from the market increases the cost of transport and thus creates variation.
(3) From the social point of view its supply is completely inelastic as land is not dynamic like other factors of production. Because land migration is not possible. But when land has two or more alternative uses, land becomes relatively dynamic with respect to any one use. When a land use is likely to be more profitable under one crop, the land can be diverted from other alternative uses and used for that use.
(4) From the point of view of alternative uses of land, land can form part of the production overhead because of its replacement value. Therefore, according to alternative expenditure principle, it cannot be said that land has no production expenditure at all.
Considering these characteristics of land brings to mind how land is distinct from other factors of production, especially capital. Like real capital like machinery, land is a form of wealth, a means of production. But while land is a gift of nature, capital in the form of machinery is a man-made means of production. Therefore, the supply of real capital can be increased even in the long run.
Also, although some lands have alternative uses, generally land has a specific use. Also the machinery can be moved. But the land cannot be shifted. In summary, capital is more dynamic than land and its supply is more elastic.
