Land

Land, as ordinarily understood, refers to the earth’s surface. But in economics, the term land is used in a very wider sense. Marshall defined land as “the materials and forces which nature gives freely for man’s aid in land and water, in air and light and heat”. Land refers to those natural resources that are useful and scarce. In other words, land stands for all-natural resources, which yield an income or have an exchange value.

Types of assets

a) Surface assets: Land for production is the upper surface of the crust, its properties, and forests or other plants growing on it naturally;

b) other surface assets: Mountain, rivers, lakes, ponds, etc found in it; including fish and ocean creatures;

c) Underground assets: minerals, crude oils, etc.

d) Over-surface assets: climate, wind, sunlight, heat, etc

Characteristics of Land

Land as a factor of production has the following characteristic features:

a) Land is fixed in quantity. It is said that land has no supply price. That is, the price of land prevailing in the market cannot affect its supply; the price may be high or low, its supply remains the same.

b) Land has original and indestructible properties.

c) Land lacks mobility in the geographical sense.

d) Land differs in fertility.

e) It is a free gift of nature.