Theory question 109
Basic Agricultural EconomicsWrite short notes on the following in agricultural production:
(a) land
(b) capital
(c) labour
(d) farm manager.
Show the model answer
Model answer
(a) Land: all natural resources (soil, water, minerals, forests) used for production; fixed in supply, immobile; reward is rent
(b) Capital: man-made goods used to produce more goods – tools, machines, buildings, money; reward is interest
(c) Labour: human physical and mental effort; can be family, hired, skilled or unskilled; reward is wages/salaries
(d) Farm manager (entrepreneur): plans, organises and combines the other factors, takes decisions and bears risks; reward is profit
Explanation
For each factor give its meaning, an example and its reward.