labour and capital intensive production

In capital-intensive industries the use and cost of capital is more than that of any other factor of production.

• True

• False

The production of different goods and services requires varying amounts of factors of production.

• True

• False

In labour intensive industries, the use and cost of labour is proportionately higher than the cost of other factors of production.

• True

• False

Labour intensive production processes tend to be used to produce:

• standardized mass products

• custom-made products

Capital-intensive production takes place if a firm spends more on capital costs than on any other factor of production-

• True

• False

Firms that become more capital-intensive usually do so to:

• Provide customers with unique custom-made products

• Increase the levels of output by mass producing their products resulting in lower unit costs.

Production in the ‘developed world’ is characterised by a greater reliance on equipment than labour. This can BEST be defined as?

• Mechanisation

• Automation

• Capital-intensive production

• Industrialisation

What will make an industry capital-intensive?

• employing many unskilled workers

• manufacturing expensive products

• occupying cheap land

• using expensive equipment and a small labour force

When would capital intensive production be more suitable?

• When each item is unique and specific to the customers needs
• When the product needs craftsmanship and special expertise
• When high and consistent quality output is required
• When it is not possible to source machinery to help make the product

Labour intensive production is often more suitable for small start-up companies who cannot afford to purchase technologically advanced machinery.

• True
• False