Answer to Question #292653 in Microeconomics for Sam

Question

Discuss the economic significance of land

Answer 1

land generally refers to the surface of the earth. In economics it includes all that, which is available free of cost from 'nature' as a gift to human being. It stands for all nature, living and nonliving which is used by man in production.

It is an important factor of production and therefore it productivity contributes largely to the economy. In every kind of production, land has to be used and therefore considered as a basic factor of production. It has the following significance;

(i) It provides raw materials to industries.

(ii) It provides surface for setting up the sites for industrial infrastructure.

(iii) Used the main factor of production in agriculture to produce crops.

(iv) All sources of power like hydro-electricity, thermal power, diesel, coal, oil, etc, come from land.

Generally, it is the original source of all material wealth and it is of immense rise to mankind. In spite of being a passive factor, it is an important factor of production. An overall economic prosperity of a country is directly related to the richness of its natural resources.