1.

State two characteristics of Capital as a factor of production.

Answer»

The two characteristics of capital as a factor of production are: 

1. Capital is not a gift of nature. It is manmade, secondary, as well as an artificial factor of production. 

2. Capital has a social cost. Capital as a resource has alternative uses. It can be put to either of the uses. The society in order to have one of them sacrifices another; accounting it as social cost another; accounting it as social cost.



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