The use of resources to make goods or services. Production can be organized within firms or within the household. In both cases inputs are employed to produce outputs. Firms produce the outputs to sell and earn profit. The household produces the output to meet the needs of the family. The relationship between inputs and outputs is determined by the production technology. Production and exchange are the two basic components of economic activity. See also batch production; census of production; factor of production; government production; household production; joint production; mass production.