Factors of production is an economic term that describes the inputs that are used in the productionof goods or services in order to make an economic profit. The factors of production include land, labor, capital and entreprise. In other words,factors of producion are theresourcesor inputsthat are used in the production process to produce output .i.e.finished goods and services.
In ordinary language, land means a surface on the earth i.e soil. But in economics, land means all the natural forces which are known as the free gift of nature. It means land includes all the natural resources of the earth such as forest, mountain, etc.
It is created by nature. The common characteristics of land are as follows:
It is given to (use) us free of cost by nature. It is not a man-made factor. The contraction and expansion of land are not possible but various kinds of utilization are possible.
It is a passive factor of production i.e. it cannot do anything by itself. The man has to do some effort to get some returns from it.
The land is an immobile factor of production. It cannot be shifted from pne place to another i.e. it is always fixed in a certain place. It means that position of land cannot be changed.
All the land found on the earth are not in same quantity. Some land is more fertile and some are less fertile. As a result of this different fertility, the cost of land is also different.
The land is found in quantity. It cannot increase and decrease. In another word, the supply of land is limited. But, man can improve the quanlity of land.
The land is an indestructive factor because no one can destroy it. Sometimes natural calamities may change its location but cannot destroy.
In the ordinary sense, the term labour means the physical work of unskilled workers but in economics, labour means the physical and mental work with an economic return. It may be the work of a mother, doctor, lawyers. If a singer sang for a money, he/she becomes a labour. Hence,labour means the human effort towards earning rewards. Therefore,labour is all that physical and mental activities which produce goods and services.
Labour is an active factor of production. Labour does not need the help of others to make him work. It brings change in production of the economy.
Labour is a mobile factor. A labour can move from one place to another in search of better opportunities. He/she can sell his/her service whenever he/she wants but it is mobile than capital because he/she is surrounded by social factors like family, society etc
All the workers are not equally capable of doing works. The service provided by labour are different. The efficiency or quality of labour can be improved through education, health, service and different types of training.
Labour is more important than other factors of production. It means if a worker do not work for a day or certain time then a labour time will be last forever. It can never be propounded or accumulated for next time. It means it cannot be stored.
Labour cannot be separated from labourer . But, a worker can sell his labour for wages. So, it is impossible to separate a labour from a worker.
Labour is both means and ends of a producer. On one side, labour plays an important role in the production process and on the other side, labour is the consumer of the product.
In ancient time, a single person uses to make a final product by himself. But, later it was realized that the division of labour means the allocation of work among the worker according to their willingness, ability and training. The division of labour has two different forms i.e.single and complex.
1) Simple division of labour
When a particular type of work is allocated to particular person or groups according to caste, religion, etc. then, it is called the simple division of labour. A labour can get the whole job from the beginning to the end.
2) Complex division of labour:
Under the division of labour, a single job is divided into different and subparts .Each part of the job is taken by specialists and an individual does not get job from beginning to the end. In this modern age, this system has been widely accepted.
Efficiency means the productivity of labour. In other words, it indicates a working capacity of the worker.Efficiency and labour are a related term because measurement of efficiency is based on the comparison. Quality and quantity also help to measure the efficiency of labour. If a worker produces small quantity but a better production then he is more efficient than others who produce normal quality. There are some factors or determinants which influence the efficiency of labour.
In other words, worjers efficiency can be defined as time taken by a worker to complete a job compared with the standard time allowed for it
(Karna, Khanal and Chaulagain)(Khanal, Khatiwada and Thapa)(Jha, Bhusal and Bista)
Jha, P.K., et al. Economics II. Kalimati, Kathmandu: Dreamland Publication, 2011.
Karna, Dr.Surendra Labh, Bhawani Prasad Khanal and Neelam Prasad Chaulagain. Economics. Kathmandu: Jupiter Publisher and Distributors Pvt. Ltd, 2070.
Khanal, Dr. Rajesh Keshar, et al. Economics II. Kathmandu: Januka Publication Pvt. Ltd., 2013.