Producer will adopt capital-intensive technique of production when the price capital is relatively cheaper than the price of labour.

True

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False

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Solution

The correct option is A True
The central problem of "How to produce?" which is faced by the economy where the economy consider either labour intensive techniques or capital intensive techniques for the production of goods and services in the economy depending upon the available resources in the economy. Therefore, a producer will go with the technique which is cheapest among all the techniques of the production.

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Similar questions

Q. When labour is relatively cheaper than capital, the producer will adopt ___________ technique of production.

Q. The higher the prices of capital relative to the prices of labour, the more production techniques should be ____________.

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(i) Which technique of production was adopted by Tif Ltd. initially? Explain whether it will be useful.

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(iv) Will Mr. Bond's technique be more useful than Tits initial technique of production?

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Q. 1. Account for the failure of the manufacturing sector in achieving the goal of labour-intensive exports rather than capital-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports.

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