Capital Intensive vs Labour Intensive Production

Examples of labour-intensive industries include:

• Manufacturing

• Teaching

• Sports coaching

• Psychiatry

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

Examples of capital-intensive industries include:

• Manufacturing

• Soft-drink production

• Oil extraction

• Hospitality

Labour intensive production processes tend to be used to produce:

• standardized mass products

• custom-made products

Capital-intensive firms, such as the aircraft industry, need a lot of money to fund their operations. This acts as a barrier to entry in the industry, since it is difficult for new firms to enter the industry:

• True

• False