We say that commodity Y is K-intensive with respect to X when:
A)more K is used in the production of Y than X
B)less L is used in the production of Y than X
C)a lower L/K ratio is used in the production of Y than X
D)a higher K/L is used in the production of X than Y

Question

Quizplus · Accepted Answer

A commodity is considered K-intensive with respect to X when it uses a lower L/K ratio compared to the production of X. This means that the commodity uses relatively more capital (K) than labor (L) in its production process. Option A is incorrect because it compares the overall use of K in Y and X, without considering their relative use. Option B is incorrect because if less L is used in the production of Y than X, it means that Y is L-intensive with respect to X. Option D is incorrect because it compares the use of K/L in X and Y, instead of L/K.

We Say That Commodity Y Is K-Intensive with Respect to X