The use of large amounts of labor relative to capital in an economy indicates:
A)labor-intensive production.
B)capital-intensive production.
C)that wage rates will be relatively high.
D)that hand-made goods are of better quality than machine-made goods.

Question

The use of large amounts of labor relative to capital in an economy indicates:
A)​labor-intensive production.
B)​capital-intensive production.
C)​that wage rates will be relatively high.
D)​that hand-made goods are of better quality than machine-made goods.

Quizplus · Accepted Answer

The use of large amounts of labor relative to capital in an economy indicates labor-intensive production. This means that the production process relies more on human labor than on machinery or automation. This type of production often leads to lower productivity and higher costs than capital-intensive production, but it also provides more employment opportunities and can be advantageous for developing countries with abundant labor resources. Wage rates may or may not be relatively high depending on various factors, such as the level of skill required for the labor, market demand for the goods produced, and competition among firms. The quality of goods produced is not necessarily related to the level of capital or labor used in the production process.

The Use of Large Amounts of Labor Relative to Capital