Factors of Production

The factors of production are the inputs an economy uses to make every good and every service. There are exactly four: land, labour, capital and enterprise. Every good or service draws on some combination of all four.

Two quick definitions used throughout this topic.

• A good is a physical, tangible product (a phone, a loaf of bread, a chair).
• A service is an action one person performs for another (a haircut, a doctor's appointment, a delivery).

Both goods and services are produced by combining the four factors.