Factor Inputs

Factor inputs are the essential resources used in the production of goods and services. They typically include land (natural resources), labor (human effort), capital (machinery, tools, and buildings), and entrepreneurship (the initiative to create and manage). These inputs work together to produce marketable products or services. For example, a farmer uses land to grow crops (land), hires workers to tend to the fields (labor), uses tractors (capital), and decides what to plant and sell (entrepreneurship). Understanding factor inputs helps in assessing how economies produce and distribute resources effectively.