Factors of Production

Goods and services are produced using the factors of production. At a minimum, the factors of production are capital and labor. Land is often considered a separate factor of production, but is also considered to be a form of capital. In addition to those that can be observed, less tangible factors such as technology and entrepreneurship are also sometimes considered to be factors of production. The contribution of individual factors to output can be measured in a production function. The interplay between the varying intensity of factor use among products and the uneven geographical distribution of factors underlies a fundamental theory of trade.