In the production process of a final good industry, the direct factor requirements per unit of output will be __________ the total factor requirements per unit of output; if the industry is relatively capital-intensive when classified by direct requirements, it __________ be relatively capital-intensive when classified by total requirements.
A) greater than; must also
B) greater than; may not necessarily
C) less than; must also
D) less than; may not necessarily

Question

Quizplus · Accepted Answer

The direct factor requirements per unit of output are typically less than the total factor requirements because the total includes both direct and indirect inputs. An industry classified as capital-intensive based on direct requirements may not necessarily remain so when considering total requirements, as the indirect inputs could alter the intensity classification.

In the Production Process of a Final Good Industry, the Direct