Question

What is the difference between Labour and Capital?

Answer 1

• Labour is the amount of work needed to so something, such as how many man-hours it takes to produce a bed.
• Capital is cash that the business can spend to produce more and thus sell more.
• In business capital intensive would mean it takes a lot of cash to start up and produce, for example, an oil refinery would be capital intensive as huge amount of cash is needed to start producing.
• Labour intensive could be a workshop producing clothes, lots of people are needed (their labour) in order to produce the clothes needed in the business.