4.3a Labour Vs Capital

Question 1

Four factors of production

Answer 1

• Capital
• Enterprise
• Land
• Labour

Question 2

Labour intensive definition

Answer 2

Production relies on using labour resources

E.g. hairdressing

Question 3

Capital intensive definition

Answer 3

Production relies on using capital resources

E.g. car manufacturing

Question 4

Advantages of labour-intensive production:

Answer 4

• People are flexible
• Cheaper for small scale production
• Cheaper where low-cost labour is available
• Personal touch

Question 5

Disadvantages of labour-intensive production:

Answer 5

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

Question 6

Advantages of capital-intensive production:

Answer 6

• Cheaper in long term
• Consistent quality
• Machinery works 24/7
• Machines are easier to manage

Question 7

Disadvantages of capital-intensive production:

Answer 7

• High set-up costs
• Machines suited to one task so inflexible
• Long delays if machine breaks
• Less motivated workers due to fear of being replaced