A steel plant uses up iron ore in the process of production. As per NCERT, the iron ore is a part of which factor of production?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Land
Iron ore is a natural resource. Natural resources used up in production, like raw materials, are part of land.
Option (1) Capital — Incorrect. Capital is a factor that has itself been produced, like a machine. Iron ore is found in nature.
Option (2) Land — Correct. Land covers natural resources, either fixed or consumed.
Option (3) Labour — Incorrect. Labour is human physical effort.
Option (4) Entrepreneurship — Incorrect. Entrepreneurship is the task of organising, coordinating and risk-taking.
Land and capital are easy to mix up. Land is given by nature, even when it is used up; capital is made by people and is not generally used up in one round of production.
NCERT (2026-27): “1.2 Context of the Present Book of Macroeconomics … To carry out production they also need natural resources – a part consumed in the process of production (e.g. raw materials) and a part fixed (e.g. plots of land). And they need the most important element of human labour to carry out production. This we shall refer to as labour. …” Glossary: “Land – Natural resources used in production – either fixed or consumed.” Glossary: “Capital – Factor of production which has itself been produced and which is not generally entirely consumed in the production process.” |