Question

Give two characteristic features of land as a factor of production.

Answer 1

The land is a different type of factor of production than others. It possesses the following characteristics:

1. Free Gift of Nature: Land is a gift of nature given to man free of cost. A man has to spend nothing to obtain it. He has to make no effort to get it. The land has no cost of production. All other factors of production have to be produced at a cost.
2. Limited in Supply: A peculiar feature of land is its fixed supply. Other factors of production can increase the supply to a great extent. No human power can alter the supply of land. So land is the only factor in production whose supply is fixed regardless of price. The supply curve of land is a vertical line at a given quantity.