Labour:Įnterprise is the willingness and ability to bear uncertain risks and to make decisions in a business. It may house a call centre or an accountancy firm. Similarly, an office block may be used for a variety of purposes. In contrast, a delivery van, used originally by a book publisher may be bought and employed by a toy manufacturer to distribute its products. They are also occupationally immobile since their use cannot be changed, as they have been made for a specific purpose. A coal mine and a dock, however, are fixed in position and so are geographically immobile. A photocopier used by a bank in one area of a country can be sold to and then used by a bank in another area. Some types of capital goods can be transferred from one part of the country to the other. The geographical and occupational mobility of capital varies according to the type of capital goods.
This is said to be negative net investment. This means that some of the capital goods taken out of use are not replaced. Occasionally gross investment may be lower than depreciation.
These additional capital goods will allow it to produce more goods and services. The country will have more capital goods. If, however, it is used by a person to play games, it is a consumer good. A computer, for example, will be a capital good if it is used by an insurance company to process insurance claims – it is producing a service. In deciding whether a good is a capital or a consumer good, it is necessary to consider who the user is and the purpose of its use. In contrast consumer goods, such as food, clothing and entertainment, are wanted for the satisfaction they provide to their owners. Capital goods are not wanted for their own sake but for what they can produce. Economists distinguish between capital and consumer goods. It includes, for example, offices, factories, machinery, railways and tools.Ĭapital is also referred to as capital goods and producer goods. Capital is any human-made (manufactured) good used to produce other goods and services. Capital:Ĭapital would have to be used in the diversion of the course of a river. For example, the course of rivers can be diverted and wildlife can be moved. Some forms of land, in its wider meaning, can be moved to a certain extent. It is not possible to move a section of land from Sri Lanka to India, for instance. Land, in its traditional sense, is however geographically immobile. Rainforests are currently declining at a rapid rate. Other natural resources, however, can change quite significantly. There is a certain degree of soil erosion which reduces the supply of arable land but also a certain amount of land reclamation which increases its supply. The amount of physical land in existence does not change much with time. Equivalently, the land used by a safari park includes not only the grass on which some of the animals graze but also the animals themselves. To attract foreign tourists, for instance, a travel company will make use of water in its swimming pools, good climate and beaches in the holidays it provides. rainforests and the sea, oceans and rivers and what is found in them, for instance fish.
So besides the land itself, it also includes what is beneath the land, such as coal, what grows naturally on the land e.g. It covers any natural resource which is used in production. Land in general terms includes the earth in which crops are grown and on which offices and factories are built, but in economics it has a wider meaning.
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