Factor endowment

When we have different things that we are good at making or doing, we call them our "endowments." For example, some people are good at cooking, while others are good at drawing. These are different endowments.

Now, when we talk about a "factor," we mean something that is necessary for producing certain things. For example, to make a cake, you need flour, sugar, eggs, and other ingredients. These ingredients are factors for cake making.

Factor endowment is a term that refers to the different types of factors that are available in different areas of the world. For example, some countries may have a lot of fertile land for farming, while others may have a lot of access to skilled workers for manufacturing.

This factor endowment can affect what types of goods a country is able to produce efficiently. If a country has a lot of fertile land, they might be better at growing crops, while if they have a lot of skilled workers, they might be better at making finished products.

So, when we talk about factor endowment, we are basically talking about the different resources that countries have available, and how those resources can affect their ability to produce certain types of goods.