What is capital and labour intensive production?

What is capital and labour intensive production?

What is capital and labour intensive production?

Capital intensive production requires more equipment and machinery to produce goods; therefore, require a larger financial investment. • Labor intensive refers to production that requires a higher labor input to carry out production activities in comparison to the amount of capital required.

What is labor intensive production?

Labor intensive refers to a process or industry that requires a large amount of labor to produce its goods or services.

What is meant by capital-intensive production?

The term “capital intensive” refers to business processes or industries that require large amounts of investment to produce a good or service and thus have a high percentage of fixed assets, such as property, plant, and equipment (PP&E).

What is capital production?

As a factor of production, capital refers to the purchase of goods made with money in production. For example, a tractor purchased for farming is capital. Along the same lines, desks and chairs used in an office are also capital.

What are examples of Labour intensive?

Industry or process where a larger portion of total costs is due to labor as compared with the portion for costs incurred in purchase, maintenance, and depreciation of capital equipment. Agriculture, construction, and coal-mining industries are examples of labor intensive industries.

What is the difference between capital intensive and Labour intensive?

Capital intensive refers to the amount of capital invested so as to increase the revenue and profit whereas labour intensive refers to amount spent on training to labour so as to increase the efficiency of labour which will ultimately result in the increased production.

What is the relationship between capital and labor?

To produce effectively, labor must be supplied with materials to work upon, and be aided by shelter, tools, machinery, and other productive appliances. All of these require capital, that is, an accumulation of previous earnings.

What does labor mean in economics?

labour, also spelled labor, in economics, the general body of wage earners.

What is Labour as a factor of production?

Labor as a factor of production refers to the effort that individuals exert when they produce a good or service. For example, an artist producing a painting or an author writing a book. Labor itself includes all types of labor performed for an economic reward, such as mental and physical exertion.

What are the advantages of capital-intensive production?

Such a production process will have a moderately low proportion of labor input and will have higher labor productivity. Also, it will more often than not have a high ratio of fixed costs to variable costs. Accordingly, the production process might have economies of scale.