4.3a - Labour vs Capital

Question 1

What are the four factors of production?

Answer 1

• Capital
• Enterprise
• Land
• Labour

Question 2

Labour intensive definition

Answer 2

Production that relies on using labour resources

Question 3

Capital intensive definition

Answer 3

Production that relies on using capital resources

Question 4

Advantages of labour-intensive production:

Answer 4

• People are flexible (can be retrained)
• Cheaper for small scale production
• Cheaper where low-cost labour is available
• Can be used to meet changing levels of consumer demand (temporary workers)
• Provide a personal touch

Question 5

Disadvantages of labour-intensive production:

Answer 5

• Harder to manage people
• People can be unreliable
• People need breaks
• Wage rises

Question 6

Advantages of capital-intensive production:

Answer 6

• Cheaper in long term
• More consistent quality
• Machines are easier to manage
• Machinery able to work 24/7
• Efficiency

Question 7

Disadvantages of capital-intensive production:

Answer 7

• High set-up costs
• Machines suited to one task (inflexible)
• Long delays if machine breaks down
• Decreased motivation in workers due to fear of being replaced