Factors of Production: Land, Labour, and Capital Exercise Questions Answers| Solutions to all Exercise Questions

 Exercise Questions: Factors of Production: Land, Labour, and Capital

I. Answer the following questions briefly:

(1) Define factors of production.

Ans: Productive resources of an economy used to produce goods and services are known as factors of production.

(2) Define land. Mention its two main characteristics. 

Ans: Land is a gift of nature such as the soil, forests, minerals, etc. The two main characteristics of the land are: 

    i. Land is a very important factor of production.

   ii. Land is a source of energy.

(3) What are the categories of labour?

Ans: The different categories of labour are:

    i. Skilled Labour: Skilled Labour workers are those workers who have to undergo a long period of training and experience, such as dental surgeons, teachers, etc.

   ii. Semi-Skilled Labour: Semi-Skilled labour undertakes some specific training, however, it is only for a short period.

  iii. Unskilled Labour: Unskilled labour does not undertake any kind of training, such as construction labour, rickshaw-pullers, etc.

(4) State the different types of capital. 

Ans: The different types of Capital are:

    i. Durable Equipment: These include tools, machines, automobiles, ovens, grills, etc.

   ii. Non-Residential Structures: These include factories, offices, buildings, power plants, shopping centres, warehouses, docks, etc.

  iii. Inventories of Output and Outputs: These include inventories of inputs and outputs and provide information about the goods already made and available with the producer.

  iv. Residential Structures: These include residential houses, apartments, etc which can be used by the producer to house his employees or business guests.

(5) What does secondary sector mean?

Ans: The Secondary sector comprises all kinds of manufacturing activities that need raw material from the primary sector.

II. Fill in the blanks:

1. We have a thriving economy because of the coordinated use of all factors of production.

2. In a  Simple  division of labour, a worker or all the members of her or his family specialise in production of a product or a service.

3.  Renewable  sources are those which can be used year after year, and renew themselves on their own.

4. Capital is defined as the stock of those reproducible or man-made durable goods that are used as inputs to produce other goods and services in the future.

5. All the factors of production have a Physical existence and can be seen, touched, and handled.

III. Match the following:

1. Primary factors of production - Land and Labour

2. Secondary factors of production - Capital and Entrepreneur

3. Renewable resources - Forest and Water resources

4. Non-Renewable resources - Iron ore and Coal

IV. State True and False:

1. Kaushik Basu is a renowned historian. False

2. Petrol reserves provide us with electricity. True

3. An entrepreneur organises and undertakes production. True 

4. There are six types of capital. False

5. In a complex division of labour, each process of production is handled by a separate group of workers. True