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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 utilised amounts of the various inputs determine the quantity of output according to the relationship called the production function .
The area of economics that focuses on production is called production theory, and it is closely related to the consumption (or consumer) theory of economics. [2] 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 ...
The ownership and organization of the social means of production is a key factor in categorizing and defining different types of economic systems. The means of production includes two broad categories of objects: instruments of labor (tools, factories, infrastructure, etc.) and subjects of labor (natural resources and raw materials).
[12] An economic system possesses the following institutions: Methods of control over the factors or means of production: this may include ownership of, or property rights to, the means of production and therefore may give rise to claims to the proceeds from production. The means of production may be owned privately, by the state, by those who ...
The former is defined as the means of production about private ownership over an economic enterprise based on socialized production and wage labor whereas the latter is defined as consumer goods or goods produced by an individual. [17] [18] Prior to the 18th century, private property usually referred to land ownership.
The goal of social ownership is to eliminate the distinction between the class of private owners who are the recipients of passive property income and workers who are the recipients of labor income (wages, salaries and commissions), so that the surplus product (or economic profits in the case of market socialism) belong either to society as a ...
Property rights theory is an exploration of how providing stakeholders with ownership of any factors of production or goods, not just land, will increase the efficiency of an economy as the gains from providing the rights exceed the costs. [20]
In a society with democratic control and production for use, there would be no class, no state and no need for money. [citation needed] For Marx, class has three primary facts: [3] Objective factors A class shares a common relationship to the means of production. That is, all people in one class make their living in a common way in terms of ...