Final answer:
Labor is the factor of production that includes the employees who work to create goods or services.
Step-by-step explanation:
Labor is a crucial factor of production encompassing the efforts of individuals involved in creating goods or services. It represents the human input, combining both physical and intellectual contributions, integral to the production process. The factors of production, including land, capital, entrepreneurship, and labor, collectively drive economic systems. While labor emphasizes the human workforce, entrepreneurship involves the innovation and organization of resources, land refers to natural resources, and capital encompasses man-made tools and machinery.
The effective combination and utilization of these factors determine a society's economic output and efficiency. Labor, in particular, underscores the significance of human involvement in economic activities, acknowledging the diverse skills, knowledge, and expertise individuals bring to the production of goods and services. This comprehensive understanding of the factors of production provides a foundation for analyzing and optimizing economic systems.