Land (economics) facts for kids

In economics, land means all the natural resources that we can't make more of, even if their price goes up. Think of things like the ground we walk on, the minerals deep inside the Earth, or the water in rivers and oceans. These are all parts of "land" in economics.

Long ago, thinkers in classical economics said that "land" is one of the three main things needed to produce goods and services. The other two are capital (like tools and machines) and labor (the work people do). When someone owns or controls these natural resources, the money they earn from them is often called rent.

What is Land in Economics?

When economists talk about "land," they don't just mean dirt! They mean all the gifts from nature that are used to make things. This includes the actual ground, but also things like forests, oceans, rivers, and even the air. The key idea is that these resources are fixed in amount. We can't create more land, more sunlight, or more natural gas deposits.

Why is Land Special?

Land is unique because its supply is limited. We can build more factories or train more workers, but we can't make more planet Earth. This makes land a very important factor of production. Its value often depends on its location and the natural resources it contains. For example, land near a city is usually more valuable than land far away, and land with oil underneath is worth more than land without it.

Earning from Land: Economic Rent

When someone owns a piece of land or controls a natural resource, they can earn money from it. This income is called "economic rent." It's the payment received for using a natural resource that has a fixed supply. For instance, if a company mines for minerals on a piece of land, the owner of that land might receive economic rent for allowing the mining. This is different from the rent you pay for an apartment, which covers the building and services, not just the land itself.

Examples of Land in Economics

• Agricultural land: Fields used to grow crops or raise animals.
• Urban land: Areas where cities are built, used for homes, shops, and offices.
• Mineral deposits: Places where valuable minerals like gold, iron, or coal are found.
• Forests: Areas with trees that provide wood and other products.
• Water resources: Rivers, lakes, and oceans that provide water for drinking, farming, and energy.

All these examples show how natural resources, which are fixed in supply, play a big role in how goods and services are produced and how wealth is distributed.

See also

In Spanish: Tierra (economía) para niños