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In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the relationship called the production function .
Factors of production is included in the JEL classification codes as JEL: D33 Wikimedia Commons has media related to Factors of production . The main article for this category is Factors of production .
Unlike the Ricardian model, the specific factors model allows for the existence of factors of production besides labor. In other words, labor is mobile, while the two other factors of production are immobile (sector specific) as opposed to the Ricardian model where labor is immobile internationally, but mobile between two sectors of an economy. [1]
The inputs to the production function are commonly termed factors of production and may represent primary factors, which are stocks. Classically, the primary factors of production were land, labour and capital. Primary factors do not become part of the output product, nor are the primary factors, themselves, transformed in the production process.
The production functions listed below, and their properties are shown for the case of two factors of production, capital (K), and labor (L), mostly for heuristic purposes. These functions and their properties are easily generalizable to include additional factors of production (like land, natural resources, entrepreneurship, etc.)
The production process and output directly result from productively utilising the original inputs (or factors of production). [3] Known as primary producer goods or services, land, labour, and capital are deemed the three fundamental factors of production. These primary inputs are not significantly altered in the output process, nor do they ...
Articles relating to the economics of production, the process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (output). Production is the act of creating an output, a good or service which has value and contributes to the utility of individuals.
If the production set Y can be represented by a production function F whose argument is the input subvector of a production vector, then increasing returns to scale are available if F(λy) > λF(y) for all λ > 1 and F(λy) < λF(y) for all λ<1. A converse condition can be stated for decreasing returns to scale.