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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 .
Download as PDF; Printable version; In other projects ... move to sidebar hide. Help. Factors of production is included in the JEL classification codes as JEL ...
A low elasticity results out of a lack of a good substitute, an inelastic demand for the final good and inelastic supply of other factors of production. Furthermore, the selected factor of production's expenditure share must be small compared to the total production cost which is often referred to as the 'importance of being unimportant'. [2 ...
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 firms then spend all of this income on factors of production such as labor, capital and raw materials, "transferring" all of their income to the factor owners (which are households). The factor owners (households), in turn, spend all of their income on goods, which leads to a circular flow of income. [20] [18] [22]
The following outline is provided as an overview of and topical guide to production: Production – act of creating 'use' value or 'utility' that can satisfy a want or need. [1] The act may or may not include factors of production other than labor. Any effort directed toward the realization of a desired product or service is a "productive ...
In macroeconomics, factor shares are the share of production given to the factors of production, usually capital and labor. This concept uses the methods and fits into the framework of neoclassical economics .