In economics, the terms ‘input’ and ‘output’ refer to the resources used in production and the goods or services produced, respectively.
Inputs are the various resources that are required to produce goods and services. They include labor, capital, land, and raw materials. Essentially, inputs are what businesses or economies invest in to create products. For example, when a factory produces cars, the assembly workers, machinery, and steel used in manufacturing are all considered inputs.
On the other hand, outputs are the final products or services that are created as a result of the production process. These can be either tangible goods, such as the cars mentioned earlier, or services, such as consulting or repair work. Outputs are the outcome of the combination of various inputs and are what businesses deliver to consumers in exchange for payment.
In summary, inputs are the resources put into the production process, while outputs are the final products or services produced. Understanding the distinction between the two is crucial for analyzing economic efficiency and productivity.