Mobility of Factor of Production: Capital




Mobility of Factor of Production: Capital

Let me just revise what capital is. Capital is the man-made factor of production which is made to make or produce things. To some extent you could say that the capital has occupational mobility, but in most cases it does not have occupational mobility. A computer being used in a medical store could be used in a water purifying plant, but the water purifying machine could not be used in the medical store. So in order to determine the occupational mobility of a machine we will have to look at the type of capital good and understand that for what different purposes could it be used?  Capital has geographical mobility because you might heard that machinery was being moved from one place to another. Sometimes it might be difficult to move a machinery from one place to another because the cost to move would be great.





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