Factor proportions refer to the relative amounts of different inputs used in the production of goods and services. These inputs typically include labor, capital, and land. The concept helps explain how countries or firms choose to allocate resources based on their availability and cost. For instance, a country rich in labor may focus on industries that require more workers, while a capital-abundant country might invest in machinery and technology. Understanding factor proportions is crucial for international trade. According to the Heckscher-Ohlin theory, countries export goods that utilize their abundant factors and import goods that require factors they lack. This leads to a more efficient global allocation of resources and can enhance economic growth.