In economics, the word 'land' is defined to include not only the surface of the earth but also all other free gifts of nature. For instance mineral resources, forest resources etc and indeed anything that helps us to carry out the production of goods and services, but is provided by nature free of cost. In facts 'Land is stock of free gifts of nature.'
The characteristics of land are as follows :
(i) Supply of land is fixed: The supply of land is fixed. It is given by nature. It is true that, from time to time, we can increase the quantity of operational land available in the country by clearing forests. However, the potentially available amount of land in the country is fixed.
(ii) Production of land is costless : Another peculiarity of land is that, it does not have any cost of production. It is already there, ready to be used. All other agents of production have to be produced at a cost. For instance, labour has to meet his cost of living and his cost of training and education has also to be accounted for. Land, however, is a free gift of nature.
(iii) Land is immobile: A third peculiarity of land is that, it is immobile. Land can not move in the sense in which labour or capital can. Therefore, there are persistent differences between the rent of land in different regions. Such differences may be caused by differences in fertility, location etc.
(iv) Land is heterogeneous : Different types of land indicate wide variations in productive capacity. It depends on the chemical composition of the soil, availability of irrigational facilities, climatic conditions etc. Hence, some plots of land may be so infertile that cultivation is not worthwhile in such cases, while some other plots of land may be very fertile.
(v) Alternative uses: Although the total supply of land is fixed, land has alternative uses. Land may be of different kinds and may be used for different purposes. In fact, all lands used for cultivation are not equally fertilised and may be used for different purposes.