I have a Person table, an Employee table, and a Contractor table. All Employees are people, all Contractors are people and every Person is either an employee or a Contractor. Like so: 
How would I be able to accomplish this concept using Model First? Inheritance?
That table structure + inheritance == TPT. In the designer it will look something like this:
…and the raw EDMX for the entities and mappings to those tables:
For a more detailed description of the different inheritance types and how they relate to physical db tables, see:
http://huagati.blogspot.com/2010/10/mixing-inheritance-strategies-in-entity.html
…and…
http://blogs.msdn.com/b/adonet/archive/2010/10/25/inheritance-mapping-a-walkthrough-guide-for-beginners.aspx