Which term describes the resources used to produce goods and services, such as land, labor, and capital?

Which term describes the resources used to produce goods and services, such as land, labor, and capital?

• A. Factors of Production
• B. Entrepreneurship
• C. Capital
• D. Productivity

Answer: (A)

Resources used to produce goods and services are called factors of production. This broad category includes land (natural resources), labor (human effort), and capital (tools, machines, buildings, and infrastructure). The idea is to identify the inputs that enable production. Capital by itself is just one input, not all of them. Entrepreneurship is another important input that organizes and combines the others, but the description given—land, labor, and capital—points to the overall set known as factors of production. Productivity, by contrast, measures output per unit of input, not the inputs themselves.

Resources used to produce goods and services are called factors of production. This broad category includes land (natural resources), labor (human effort), and capital (tools, machines, buildings, and infrastructure). The idea is to identify the inputs that enable production. Capital by itself is just one input, not all of them. Entrepreneurship is another important input that organizes and combines the others, but the description given—land, labor, and capital—points to the overall set known as factors of production. Productivity, by contrast, measures output per unit of input, not the inputs themselves.