Chapter 7 - Factors Of Production
Economics Solutions for Class 12 Commerce Economics.
Fill in the blanks with appropriate alternatives given in the brackets:
i. Land is subject to ___________ returns. (increasing/ constant/ diminishing/ negative)
ii. ______________ is regarded as primary factor of production. (Land/ Labour/ Capital/ Entrepreneur)
iii. Capital is a __________ factor of production. (real/ artificial/ natural/ free)
iv. Land is a free gift of _______________. (nature/ human/ foreign/ nation)
v. __________ is a leader of organisation. (A capitalist/ A consumer/ A seller/ An organizer)
Answer:
i. Land is subject to diminishing returns.
Explanation:
Land is a fixed factor of production. When more and more units of labour and capital are applied to land, the total output increase but only at a decreasing rate.
Thus, we can say that land is subject to diminishing returns.
ii. Land is regarded as primary factor of production.
Explanation:
Land is regarded as a primary factor of production as it is used in every kind of production. It facilitates production and does not change itself in the process. Thus, it acts as a base in the production process.
iii. Capital is a artificial factor of production.
Explanation:
Capital includes all the capital goods or assets used in production. Since capital is not a gift of nature, and is a man made factor of production, it is regarded as an artificial factor of production.
iv. Land is a free gift of nature.
Explanation:
Land is not created by Man. It is available to human beings without any effort. That is, all natural resources, flora and fauna, earth, buildings, avenues, air, water, minerals etc. are available to human beings as free gifts of nature.
v. A capitalist is a leader of organisation.
Explanation:
A capitalist is a person who invests his money in an organisation with the sole objective of making profits. He/she is a firm believer of capitalism. Also, he organises the production process, by hiring services of various factors of production to produce output, and sells the output in the market. In this way, we can say that a capitalist is the leader of an organisation.
