In ordinary sense ‘land’ refers to the soil
or the surface of the earth or ground.But, in Economics, land means all gifts of Nature owned and controlled by human beings which yield an income. Land is the original source of all material wealth. The economic prosperity of a country depends on the richness of her natural resources.
The quality and quantity of agricultural wealth are determined by the nature of soil, climate and rainfall. The agricultural products are the basis of trade and industry. Industry survives on the availability of coal-mines or waterfall for electricity production. Hence, all aspects of economic life like agriculture, trade and industry are generally influenced by natural resources which are called as “Land” in economics.
Characteristics of Land:
×Land is a primary factor of production.
×Land is a passive factor of production.
×Land is the free gift of Nature.
×Land has no cost of production.
×Land is fixed in supply. It is INELASTIC in supply.
×Land is permanent.
×Land is immovable.
×Land is heterogeneous as it differs in fertility.
×Land has alternative uses.
×Land is subject to Law of Diminishing Returns.