CMA Foundation · Fundamentals of Business Economics and Management · Means of Production
Which of the following is a characteristic that distinguishes land from capital as a factor of production?
Land is a free gift of nature and its total supply is fixed for the economy, unlike capital, which is man-made and produced by saving and investment. Land is also geographically immobile, so the other statements are incorrect.
- ALand is a man-made factor of production
- BLand is a free gift of nature and its total supply is fixed for the economyCorrect
- CLand is perfectly mobile between uses
- DLand is produced by saving and investment
Explanation
Land is a natural resource, a gift of nature, with a fixed aggregate supply. Capital is man-made, produced through saving and investment, so the other options describe capital or are false because land is geographically immobile.
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