The three categories of resources are land, labor, and capital. Which of the following would belong to the category of land?a. A taxicab b. Computer software c. One hour of legal counsel d. A...
The three categories of resources are land, labor, and capital. Which of the following would belong to the category of land?
Land, labor, capital and entrepreneurship are factors of production. They are resources employed towards the development of products and services. Their combination is expected to yield an economic profit.
Land includes all natural resources, referring to actual land and anything else that comes from it, for instance, gold, oil, forests and water. Land resources provide the raw materials used in the production of a product or a service. Land generates rent as income.
Labor included the people involved in the development of products and services at all levels of the production process. They contribute their effort and energy to turn the raw materials into finished goods and ensure they reach the end user. Labor earns salaries or wages as income.
Capital includes all tools and machinery used by the labor force to turn the raw materials into finished product and services. Capital earns interest as income.
Entrepreneurship has been included as the fourth factor of production depending on the economic school of thought being discussed. Those opposing entrepreneurship as a factor of production asserts that it belongs to the factor of labor. However, those in support assert that it is a special type of labor because the entrepreneur combines all the other three factors of production to create products and services towards generating an economic profit.
The parking lot comes close, but it is basically land that has been transformed by the factor of labor through construction. This transformation disqualifies it as a land factor.
Labor refers to people involved in the development of products and services at all levels of the production process. They contribute their effort and energy to turn the raw materials into finished goods and ensure they reach the end user. Labor earns salaries or wages as income.
In economic terms, none of these is "land." The parking lot comes closest, but it is not land. A, B, and D are all forms of capital while C is labor.
Land is a term that can only be used to refer to a resource that is provided by nature. It cannot be something that human beings have made. The parking lot has been made into a parking lot by people. It is presumably paved, for example, and marked with lines. This means it cannot be land. It, like A and B are goods that are made by human beings.
C is, of courses, not land. It is the use of the abilities and the time of the lawyer. This makes it labor.
Thus, none of these can accurately be called "land" in economic terms.