Question

Service often requires a higher labour content, whereas the production of goods is more capital intensive.

true
false

Answer 1

Service often requires a higher labor content, whereas the production of goods is more capital intensive.

Step-by-step explanation:

In general, it is true that service often requires a higher labor content, whereas the production of goods is more capital intensive.

When providing a service, such as haircuts or fast-food meals, the labor component is usually higher, as it involves direct interaction and manual labor. On the other hand, the production of goods, such as cars or computer software, tends to be more capital intensive, relying heavily on machinery and technology.

This can be seen in the examples provided, where different production technologies involve varying levels of labor and machinery, and firms may choose to substitute labor for machinery as the cost of labor increases.