What are the basic characteristics of land in economics?
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In economics, land is one of three types of resources. There are land, labor, and capital. Resources are those things that are used to make other goods and services.
Land is defined as anything that is not made by humans but is exploited to produce a good or service. Some examples of land would be
- The surface area on which a building is built
- Crude oil that can be taken from the ground
- Any mineral that occurs naturally and can be mined for use.
Land does not include something like the wheat that goes into bread. That is a natural product, but it was produced by people's efforts.
As a support and source of life of higher plants, the soil is one of the essential factors of the biosphere.
In soil, especially humus, are concentrated most of living substances of land and biotic potential energy.
Soil fulfills two essential functions: supplier of nutrients for plants and, at the same time, container and waste transformer, having the protection role of ecosystems and environmental purification.
Due to its ability to maintain plants' life, defined as fertility, soil is the main means of production in regenerative nature agriculture. If it is rational used, soil is not consumed in one production cycle, but keeps it's natural fertility and even it's gaining characteristics and improving qualities.
A good management of soil resources is not possible unless the soil attributes are known, as physical environment of plant life, in close correlation with specific natural conditions in which it was formed and evolved.
In economics land refers to one the three basic factors of production, the other two being labour and capital. These factors of production are used as inputs that go into production of goods and services. As used in economics the land as a factor of production includes all natural resources such as physical land used for farming and other purposes, energy resources, water, and minerals which are considered to be gift of nature.
The supply of land available in an economy is determined only by the non-economic factors such as geographical and geological features of the economy, unlike the supply of other factors of production, which are determined by economic as well as non-economic factors.
Land is not just a component of production, it is involved in varieties of perspectives such as immobility, divisibility, real estate, capital value etc. For better understanding read this article - Characteristics of Land - Economic, Physical, Social
-it has got the following characteritics
1.inelastic price elasticity of demand
2.its cross elasticity of demand is inelastic
3.its income elasticity is inelastic
4.has less substitutes
5.land is immobile
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