Question

Which of these features of capital as a factor of production makes it different from other factors of production?

Options

• It is a mobile factor of production

• The supply of capital can be increased

• It is man-made factor of production

• It will lead to increased productivity

Answer 1

It is man-made factor of production

Explanation:

• Capital is unique among the factors of production because it is man-made. Unlike natural resources (land) and human effort (labour), capital refers to tools, machinery, buildings, and equipment created by human effort to produce goods and services.
• The other features mentioned—mobility, the ability to increase supply, and leading to increased productivity—can also apply to other factors of production. Still, capital being man-made primarily distinguishes it from the others.