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Characteristics of Labor As A Factor of Production

Labor has several unique characteristics that distinguish it as a factor of production: 1) Labor is perishable and cannot be stored for future use like other factors - once time is lost, it is lost forever. 2) Labor cannot be separated from the laborer themselves, unlike land and capital which can be separated from their owners. 3) Labor depends directly on human effort and so is heterogeneous, with each laborer differing in their labor power. 4) Labor is less mobile than capital and other goods, as laborers cannot be transported between places as easily.

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Shawn Mendes
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536 views8 pages

Characteristics of Labor As A Factor of Production

Labor has several unique characteristics that distinguish it as a factor of production: 1) Labor is perishable and cannot be stored for future use like other factors - once time is lost, it is lost forever. 2) Labor cannot be separated from the laborer themselves, unlike land and capital which can be separated from their owners. 3) Labor depends directly on human effort and so is heterogeneous, with each laborer differing in their labor power. 4) Labor is less mobile than capital and other goods, as laborers cannot be transported between places as easily.

Uploaded by

Shawn Mendes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

CHARACTERISTICS OF

LABOR AS A FACTOR
OF PRODUCTION
PERISHABLE IN NATURE
 Labor is highly perishable than
the other factors of production.
They cannot be warehoused.
They cannot be postponed or
accumulated for the next day.
Once the time is lost it is lost
forever.
LABOR IS INSEPARABLE FROM
THE LABORER
 Land and capital can be separated
from their owner, but labor cannot
he separated from a laborer.
Labor and laborer are
indispensable for each other. 
HUMAN EFFORT
 It is directly related to human
effort, unlike the others.
LABOR IS HETEROGENEOUS
 We cannot expect labor to be
uniform : Every laborer is
unique and so his labor
power will also differ from
the others.
NOT EASILY MOBILE
  When compared to capital and
other goods, labour is less
mobile. Capital can be mobilised
from one place to another and
labour cannot be transported
from one place to another easily.
LABOR HAS A POOR
BARGAINING POWER
 Labor can’t be stored, isn’t very
mobile and has no standard or
reserve price so generally
laborers are forced to work for
whatever wages the employer
offers.
SUPPLY OF LABOR IS
RELATIVELY INELASTIC
 The supply of labor is inelastic in
a country at a particular time. It
means their supply can either be
increased not decreased if
demands so.

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