Consider an economy that only produces steel and shoes; steel is capital intensive and shoes are labor intensive. Which industry has a lower capital-labor ratio?

Question

Quizplus · Accepted Answer

Shoes have a lower capital-labor ratio compared to steel because they are labor-intensive, which means that they require more labor relative to capital. On the other hand, steel requires more capital relative to labor.

Consider an Economy That Only Produces Steel and Shoes; Steel