FACTORS OF PRODUCTION NCERT QUESTIONS AND ANSWERS
Q. How are the factors of production different from each other? What are the difficulties you faced in classifying the factors of production in the exercise given in-text?
Ans – The factors of production are the resources used to produce goods and services. They are traditionally classified into four main categories, each with distinct characteristics:
a) Land
b) Labour
c) Capital
d) Entrepreneurship
Overlapping Categories: For example, is a tractor land or capital? It’s a man-made tool, so it should be capital — but since it’s used on land, the confusion arises.
Modern or Digital Items: New items like software, intellectual property, or AI systems are hard to classify. Are they capital or a new factor entirely?
Each factor of production is different in source, role, and reward. The difficulty in classifying them comes from overlaps, modern economic complexity, and unclear boundaries between categories. The exercise likely revealed how theory and real-world situations can differ.
Q. How does human capital differ from physical capital?
Ans – Human capital and physical capital are both important resources in production, but they differ in several key ways:
Human Capital- The knowledge, skills, experience, and health of people that make them productive.
Physical Capital – The man-made tools, machines, buildings, and equipment used in production.
| Human Capital | Physical Capital |
| skills, Knowledge, health of people | tools, machine, buildings |
| Intangible | Tangible (vastawik) |
| Education, training, health | investment in equipment or infrastructure |
| It can’t be transfered | It can be transfered |
| ex, teacher | ex, A school building |
Both types of capital are essential for economic growth, but they contribute in different ways — one through people’s abilities, the other through tools and equipment.