Like any other good or service, markets, very active markets in fact, exist for factors of production. By factors of production, or simply factors, or inputs, we just mean those things that are used to produce final goods and services. Our goal is this section is to understand how the markets for factors of produciton work.
Depending on what is being produced, a variety of factors are used. For example, the primary factor in producing this website is labor. It takes thousands of hours of human effort to produce an extensive website such as this. It also requires computer hardware and software, a place for the computers and humans to be indoors while working on the site, electricity to operate the computers.. and so on.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved