Question

Identify the correct statement from the following.

Options

• Land is indestructible.

• Labour is perishable.

• Capital is a passive factor of production.

• All the above.

Answer 1

Land is indestructible, labour is perishable and capital is a passive factor of production.

Explanation:

1. Land is indestructible: This means that the physical existence of land cannot be destroyed, although its quality or fertility can be affected by various factors.
2. Labour is perishable: Labour is considered perishable because it cannot be stored for future use; if a worker does not work on a given day, the potential output from that day's labour is lost forever.
3. Capital is a passive factor of production: Capital is considered passive because it requires the active involvement of labour to be productive. Capital alone cannot produce goods or services without the direction and use of labour.