Factors of Production

Factors of production are used in a production of economic goods as inputs. Economic theory usually defines three types of factors of production:

• Land (natural resource) – part of nature, it is used in agriculture, natural resources are used for production of materials and energy
• Labor (human effort) - purposeful human activity for production and transforming inputs into outputs
• Capital Stock (means of production, finance/financial capital) – it is a result of previous production (capital goods)