Labour as a factor of production
Labor as factor of production is any human effort used productively (with an output of goods or services) for which payment is made. Honorary work and work for enjoyment are excluded
Special Features of Labour
Perish ability - cannot be stored, today's effort cannot be saved for tomorrow;
Inseparability from labour - cannot be transferred by owner;
Immobility as compared to capital and enterprise;
Supply of labour not adjustable in short run (it takes 20 years to produce a worker).
Labor as a factor of production: Labor is human recourse of production. Any form of physical or mental effort done to the production of goods and ...view middle of the document...
e. Transport facilities, customs and tradition etc. 8. Difference in Labor power: The laborers are differentiated in respect of skill power of efficiency, education, training etc. 9. No increase in supply quickly: There can be no rapid adjustment of the supply of labor to demand for it because supply cannot be increased quickly nor it can be reduced.
Captal as a factor of production
Functions of Capital:
Capital occupies an important position in determining the rate of economic development in the country. The main functions of capital, in brief, are as under:
(i) Capital provides equipments which help in the process of economic development.
(ii) An increase in the stock of capital goods like machinery factories, equipments, buildings, economic overhead capital (transport, railroad, communication, etc) and equipment for education, health, shelter etc., enhances the growth of output per capita and consequently the income per capital raised.
(iii) The accumulation of capital makes the labor better equipped and delays the operation of law of diminishing returns in agriculture and industry to a great extent.
(iv) Capital determines the quantity and...