Ch:5 Factors Of Production

Question 1

What is meant by factors of production?

Answer 1

The factors which man requires to produce commodities of his need are called factors of production.
They are the following four:

Land
Capital
Labour
Organization

Question 2

What is meant by land?

Answer 2

Land is the first basic factor of production. It does not mean the surface of land on which we walk or live. It includes every thing which is gifted us free by nature e.g. mountains, forests, rivers, oceans, climate, rain and minerals, such as iron
coal, petrol etc.

Question 3

State the meaning of labour

Answer 3

Labour is second factor of production. Labour means mental or physical work
undertaken for reward. Labour can be mental or physical.
For example, teaching ,work by a clerk and treatment by a doctor are mental work. Quite contrary to that the work done by a labour, carrier, farmer, and carpenter is physical work.
The condition for labour is that it is done for wages whether they are in the form of money, goods or grains.

Question 4

What is meant by capital?

Answer 4

Capital is third factor of production. It means that part of income or wealth which is spent to produce more wealth or increase income e.g., machines, equipments
raw material, factories, roads, railway lines, dams and grid stations etc.

Question 5

State the meaning of organization.

Answer 5

The factor which is needed to produce goods by the combination of land, labour and capital is called organization or entrepreneur.
An entrepreneur organizes the system of the whole business. He combines other factors to do work. He pays them rewards and earns profit by selling produced goods. Sometimes he has to bear loss.

Question 6

What is meant by productivity of labour?

Answer 6

Ans: Productivity of labour means the productive power of labourer or power of performance.

Question 7

What is meant by productivity of capital

Answer 7

Productivity of capital means power of production or power of performance of
capital. If production increases to great extent with the help of capital, its productivity will be high and vice versa.

Question 8

Land is immobile. Explain

Answer 8

Geographically, there is no mobility in land. In other words, land cannot be
shifted from one place to another one. For example, it is not possible to shift a
fertile Piece of land in the place of a barren piece of land.

Question 9

What is meant by productivity of land

Answer 9

Productivity of land means the power or capacity of production of land. The more
fertile piece of land gives more production and its productivity is high. While the less fertile land, gives less production and its productivity is also low.

Question 10

What is meant by production of wealth?

Answer 10

Production of wealth means the production of such goods and services which
have following three characteristics:-
(i) Utility (ii) Scarcity (iii) Transferability

Question 11

Write four characteristics of land.

Answer 11

Following are four characteristics of land:
1-Land is a free gift of nature.
2-Its supply is limited,
3-All the pieces of land are not equal in fertility.
4-Geographically, there is no mobility in land

Question 12

Write four points of importance of land

Answer 12

Following are four points of importance of land:
1) We get our food from land.
2) We build our houses, shops, offices, factories and markets on land.
3) We get various kinds of minerals from under ground mines.
4) Means of energy e.g. coal, gas and oil are also found in land.

Question 13

Write four factors of productivity of land.

Answer 13

Ans: Following are four factors of Productive of land:
1) Natural factors i.e. natural characteristics.
(1) climate. (ii) Water

2)Human resources.
3)Means of Transportation
4)Supply of capital.

Question 14

Write importance of labour in the words of prof Marshall.

Answer 14

Ans: A barren piece of land entrusted to an active and hard working man will become paradise while a fertile piece of land in the possession of a lazy man will become
a desert.

Question 15

Write four characteristics of labour.

Answer 15

Labour and labourer cannot be separated.
Labour cannot be stored.
Bargaining power of labourer is weak.
Productivity of different labourers is different

Question 16

Write four factors influencing productivity of labour

Answer 16

four factors influencing productivity of labour:
Physical health of the labourers
Moral qualities of the labourers
Hereditary qualities of the labourers
Conditions of the work.

Question 17

Write four points of importance of capital.

Answer 17

1) Development of agriculture depends on the use of latest machinery and
inputs.

2) Industrial development depends on the supply of capital.

3) Discovery of various minerals and their attainment depends on machines

4) Productivity of labouerers increases many times when they produce good
with the help of latest machines and tools

Question 18

Write four factors influencing productivity of capital.

Answer 18

Following are four factors influencing productivity of capital:
(i)Combination of capital with other factors.
(ii). Trained labour
(iii)Proper use of capital.
(iv) Nature of raw material.

Question 19

Write importance of organisation.

Answer 19

Importance of organization: Prof Stonier and Hague writes about the
importance of organisation. “The basic difference between entrepreneur and other
factors of production is that land, labour and capital can be hired while
organization cannot be hired”.

Question 20

Write four functions of organisation.

Answer 20

1) Planning of business.
2) To attain best combination of factors of production.
3) To manage the business.
4)To make payment of rewards to other factors of production.