Final answer:
A professional consultancy firm is an example of a service that offers labor and expertise rental. Labor cost implications in low-skill manufacturing and footloose industries contrast with high skill labor in sectors where the cost of living is high. Production choice of firms can be influenced by the costs of labor and machines, and union wage demands.
Step-by-step explanation:
An example of a service that offers labor and expertise rental is a professional consultancy firm. In such firms, companies or individuals can hire experts for advice or to complete specific tasks that require specialized knowledge. For instance, a business may hire a financial consultancy firm to provide expert advice on investment strategies or to manage their finances. The fee structure for these services usually includes a base fee and may also involve an hourly rate depending on the complexity and duration of the service provided.
Labor represents the human effort applied in the production of goods and services. When looking at different industries, such as low-skill manufacturing or high skill labor sectors like computer programming, the cost of labor has significant implications on the overall cost of producing goods and services and consequently affects where companies choose to locate their operations.
Footloose industries, like the textile industry, tend to relocate to areas where labor costs are lower because they can move without significantly affecting their profitability. On the other hand, industries that require highly skilled workers are often found in areas with higher costs of living, which can lead to local inflation in wages and housing costs, as seen with California's Silicon Valley.
In terms of production technology choices, as exemplified by local governments hiring private firms for services like park clean-up, firms will choose between labor-intensive or capital-intensive methods based on the relative costs of labor and equipment. Union demands for higher wages may also influence firms to choose production methods with more physical capital and less labor, hence increasing labor productivity.