Final answer:
Production inputs that include technology, tools, information, and physical facilities are known as physical capital, which, along with technology, are crucial for producing goods and services.
Step-by-step explanation:
Production inputs consisting of technology, tools, information, and physical facilities are referred to as physical capital. This encompasses the physical components like machinery and facilities that aid in the creation of goods and services. Technology, another essential production factor, includes both the innovative inventions and methods that enhance efficiency, allowing for increased output with the same level of inputs. Considering technology, it involves different methods of combining inputs, not just new devices or gadgets. Firms utilize these elements to determine the most cost-effective production technology that permits them to generate the desired output level while optimizing costs and, as an effect, potentially increasing profits.
For instance, in agriculture, land, water, seeds, and fertilizer are crucial physical capital inputs for food production. Similarly, new technologies in seed varieties can lead to more resilient crops and higher yields. In manufacturing, the choice between labor and physical capital is crucial, with alternatives ranging from manual labor to the implementation of automated systems or robotics.