Multiple choice

Capital intensive technique would get chosen in a

  1. labour surplus economy

  2. capital surplus economy

  3. developed economy

  4. developing economy
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Capital-intensive techniques require more capital relative to labour. They are chosen when capital is abundant and relatively cheaper than labour - that is, in a capital surplus economy. In labour surplus economies, labour-intensive techniques are more appropriate because labour is the relatively cheaper factor.

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