The functions are
(i) Decision making
(ii) Management control
(iii) Division of income
(iv) Risk-Taking
(v) Uncertainty-Bearing

Characteristics of Capital :
(i) Capital is a passive factor of production
(ii) Capital is man-made
(iii) Capital is not an indispensable factor of production
(iv) Capital has the highest mobility
(v) Capital is productive.
(vi) Capital lasts long.
(vii) Capital involves present sacrifice to get future benefits

Merits of division of labour
(i) It improves efficiency of labour when labour repeats doing the same tasks.
(ii) Facilitates the use of machinery in production? resulting in inventions.
(iii) Time and Materials are put to the best and most efficient use.
Demerits of division of labour
(i) Repetition of the same task makes labour to feel that the work is monotonous and stale. It kills the humanity in him.
(ii) Narrow specialization reduces the possibility of labour to find alternative avenues of employment. This results in increased unemployment.
(iii) Reduce the growth of handicrafts and the worker loses the satisfaction of having made a commodity in full.

Land as a factor of production refers to all those natural resources or gifts of nature which are provided free to man.
Characteristics of Land :
(i) Land is a Free Gift of Nature
(ii) Land is fixed in supply
(iii) Land is imperishable
(iv) Land is a Primary Factor of Production
(v) Land is Immovable
(vi) Land has some Original Indestructible Powers
(vii) Land Differs in Fertility

There are three types of production
1. Primary production
2. Secondary Production
3. Tertiary or Service Production
1. Primary Production:
(i) Primary production is carried out by 'extractive' industries like agriculture, forestry, fishing, mining and oil extraction
(ii) These industries are engaged in such activities as extracting the gifts of nature from the earth's surface, from beneath the earth's surface and from the oceans.
2. Secondary Production:
(i) This includes production in manufacturing industry, turning out semi-finished and finished goods from raw materials and intermediate goods, conversion of flour into bread or iron ore into finished steel.
(ii) They are described as manufacturing and construction industries.
(iii) Such as the manufacture of cars, furnishing, clothing and chemicals, as also engineering and building.
3. Tertiary Production:
(i) Industries in the tertiary sector produce all those services which enable the finished goods to be put in the hands of consumers.
(ii) These services are supplied to the firms in all types of industry and directly to consumers.
(iii) cover distributive traders, banking, insurance, transport and communications. Government services, such as law, administration, education, health and defence, are also included.