If the process is divided among a number of workers, they would be able to perform it efficiency and in less duration of time. Consequently, the productivity of the organization would be affected. Some processes of an organization are so long, thus, cannot be completed by a single worker or he/she would require more time to complete those processes. Refers to one of the main advantage of division of labor. This is because laborer needs to sell his/her labor. Some of the peculiarities of labor are as follows: This peculiarity of labor differentiates it from rest of the factors of production. According to Marshall, “Any exertion of mind or body undergone partly or wholly with a view to some good other than the pleasure derived directly from the work is called labor.”Īmong all the factors of production, labor is the only factor that is living. However, in economic terms, a work, physical or mental, carried out for monetary purpose is called labor.Ī work that is undertaken by an individual for the sake of interest and pleasure, then the individual would not be regarded as labor in economics. Labor is commonly thought of a group of unskilled labor working in factories. This factor involves human services and efforts for the production of goods or services. Labor constitutes one of the important factors of production. This leads to variation in the prices of land. Considered to have infinite variation in terms of fertility. Considered as an immobile factor of production. Regarded as a permanent input having certain inherent properties, which are original and indestructible. In such a case, capital and labor act as substitute of each other. However, if the organization has shortage of capital, then it would use more labor instead of investing on advance technology and machines. On the other hand, if an organization has enough capital to purchase advance technology, then it would prefer to reduce the number of labor. In such a case, land and capital are complementary to each other. Similarly, when skilled labor is available to produce goods and services, then only the organization would invest capital for production purpose. The factors of production can be used as complementary as well as substitute of each other.įor example, if an organization has adequate capital only then it would hire labor for producing goods and services. This implies that the factors of production should be used in combination, so that the production target can be achieved. Hence capital has also mobility for bringing changes in volume of production.The production process of an organization can be efficient, if there is an optimal use of factors. Additional money capital entering into the market may be transferred to the industries which have chances for development. But the capital goods are used for producing different types of goods and services. Additional labor force which migrates to towns in search of jobs may be employed in new industries without any difficulty.Īnother two types of factors of production in economics are-Ĭapital - mobility: When compared to labor, capital has less mobility. So naturally the laborers will have the inclination of mobility for bringing changes in production. Normally new industries require less number of laborers. Invention of new machinery and their use in industries spread of education among the laborers, provision of training and reorientation courses by the government etc., lead to the increase in the occupational factors of production. The reason is that it requires excellent knowledge, technological efficiency and experience and dynamism. c) Occupational mobility: Occupational mobility is somewhat difficult.b) Horizontal mobility: Horizontal mobility implies the desire of the laborers for moving from one industry to the other in the same place and in the same occupation.We observe the fact that doctors, engineers and other technocrats of India have been migrating to the advanced countries for want of better salaries and facilities. Geographical mobility may be international or national or regional. are responsible for the geographical mobility of factors of production. Several factors like improvement in the means of communication and transport, education and literacy programmes, attachment to motherland, linguistic feelings etc. a) Geographical mobility: Geographical mobility means the movement of factors of production (except land) from one region, state or place to the other regions, states or places.These different types of mobility of factors of production in economics are explained as below.
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