Question

State two characteristics of capital as a factor of production.

State two characteristics (features) of capital.

Answer 1

1. Capital is a produced means of production.
2. Capital is a passive factor of production.
3. Capital is a mobile factor

Answer 2

1. Man-Made Factor of Production: Capital, unlike land, does not seem to exist out of thin air. It is a fully produced means of production established by human labour and effort in the past to aid in the future production of goods and services.
2. Passive Factor of Production: Capital is essentially inflexible and cannot produce anything on its own. It requires active human intervention, specifically labour, to operate machinery, run factories, or use raw materials to produce wealth.