IGCSE Economics Paper-2: Specimen Questions with Answers 97 - 97 of 100

Passage

Labor intensive industry requires a large amount of labor to produce goods and services. In contrast to capital intensive which requires less amount of labor? Example 10 workers can produce 10,000 products per day.

Question 97 (1 of 4 Based on Passage)

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State the difference between capital intensive and labor intensive.

Explanation

Capital intensive and labor intensive are the types of production methods which are used in the production of goods and services. An industry will be labor intensive or capital intensive depends on the ratio of labor and capital required in the production of goods and services.

Capital Intensive and Labor Intensive Are the Types of Production Methods
S. no.Capital-IntensiveLabor- Intensive
1Capital intensive refers to the equipment and machinery, vehicles and so on that businesses use to make a product.‘Labor’ refers to the people required to carry out a process in a business.
2Capital-intensive process refers to the process that requires huge amount of cost as compared to labor costLabor-intensive process refers to the process that requires high level of labor as compared to capital investment.
3These processes are more likely to be highly automated and to be used to produce on a large scale.These processes are more likely to be used to produce individual or personalize products or to produce on a small scale.

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