In India rural area is known for carrying out agricultural and allied activities. Someamount of land in the plain region is specially developed to establish industries andurban areas such as towns and cities.6.1.2 LabourIn general labour implies the human effort through physical and mental exertions inthe production of goods and services. A person working on the agricultural field issaid to provide his physical labour while a writer of a book is said to provide hismental labour. People who provide labour are known as human resources.Production activities require both skilled and unskilled labour. Purely physical laboursuch as loading and unloading, ploughing on the field etc do not require special skill.But to become an engineer, doctor, teacher, lawyer, mechanic, electrician or tailoretc one must acquire skill through education and training.6.1.3 CapitalBy capital, we mean all man made appliances and all types of wealth used inproduction. Capital consists of machinery, tools, buildings, materials etc. Whereasland is a natural resource, capital is a man made resource. Capital is used to increasethe efficiency of other factors of production like land or labour. The efficiency of landcan be increased by use of better irrigation facilities and machines. However, capitalis a passive factor of production and cannot be used without employing labour towork. Capital has a limited span of life, and becomes obsolete after a certain period.Small tools like, screwdrivers, calculators to heavy machines like engines, tractors,
MODULE - 2About EconomyBasic Economics ActivitiesECONOMICSNotes47ships are all examples of fixed capital, as they can be used in production for manyyears. Fixed capital also includes the buildings and heavy machines. The workingcapitalincludes raw materials like cotton yarn, clay, seeds, fertilizers, which are used-up in the process of production.6.1.4 EntrepreneurshipSomebody must take the initiative to start the process of production of goods orservices by bringing land, labour and capital together in right proportion. He will beresponsible for choosing the right type of land, labour and capital and take importantdecisions with respect to quantity to be produced, money to be spent to buy thefactors and raw materials, marketing the output produced etc. Entrepreneurshipis the art of organizing the production activity. The person who makes the decisionsand controls the production process and bears the risks and uncertainties involvedin production is called an entrepreneur. He/She should be knowledgeable,courageous and should possess leadership qualities. The objective of an entrepreneuris to get maximum production by using the given resources and make arrangementsfor the sale of the finished products. He/she is also responsible to make paymentsto other factors of production.
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- Fall '16
- Economics, Business, 6.1.3 Capital, work. Capital