Factors of Production

Economics → Quiz → Factors of Production

Inputs are commodities or services that are used to produce goods and services.

An economy uses its existing technology to combine inputs to produce outputs. Outputs are the various useful goods or services that result from the production process and are either consumed or employed in further production.

Factors of Production
Another term for inputs is factors of production. These can be classified into three broad categories:

  • Land
  • Labor, and
  • Capital

Land or, more generally, natural resources, represents the gift of nature to our societies (for example, minerals, oil & gas).

Labor consists of the human time spent in production.

Capital resources form the durable (long-lasting) goods of an economy, produced in order to produce yet other goods.