Reasons for production choices

Question 1

What are the reasons for production choices? (factors)

Answer 1

• Quantity of goods required
• Skills of the workforce
• Cost of labour
• Finance available
• Technology available

Question 2

What is the description of quantity of goods required?

Answer 2

If large quantities are required, capital-intensive production will be more suitable than labour-intensive.

Question 3

What is the description of skills of the workforce?

Answer 3

If the workforce is highly skilled, their expertise would be better suited to labour-intensive production.

Question 4

What is the description of cost of labour?

Answer 4

Rising labour costs (perhaps due to a rising minimum wage) could mean that the business should move to capital-intensive production.

Question 5

What is the description of finance available?

Answer 5

Large amounts of finance are required to equip factories or hire the number of staff needed for large-scale capital-intensive production.

Question 6

What is the description of technology available?

Answer 6

If the business doe not have technology required for capital-intensive production, labour-intensive is the only option.