Question

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

• A. capital-intensive
• B. labour-intensive
• C. land-intensive
• D. either A or C

Answer 1

The correct option is B labour-intensive

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.