The choice between labour and capital intensive techniques is related with:
Options
AWhat to produce?
BHow to produce?
CFor whom to produce
DAll of the above
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Introduction to Business EconomicsMTP Apr 24Question 597 of 209
All Questions Correct Answer
✅ Option b — How to produce?
All Options:
- AWhat to produce?
- BHow to produce?
- CFor whom to produce
- DAll of the above
Detailed Solution & Explanation
• This question relates to the central problems of an economy, which every society must address due to scarcity.
• The choice between labour-intensive and capital-intensive techniques falls under the problem of "How to produce?". This problem deals with the method or technology to be used in the production process.
• Labour-intensive techniques involve using more human labour relative to capital (machines, equipment). Capital-intensive techniques involve using more capital relative to labour. The decision depends on factors like the availability and cost of labour and capital, and the desired efficiency.
• Therefore, deciding whether to use more workers or more machines to produce goods directly answers the "How to produce?" question.
• Option (A) "What to produce?" is incorrect because it deals with the types and quantities of goods and services an economy should produce (e.g., food vs. weapons, consumer goods vs. capital goods). It doesn't concern the production method.
• Option (C) "For whom to produce?" is incorrect because it addresses the distribution of the produced goods and services among the members of society (e.g., who gets what, how income is distributed). It's about the beneficiaries, not the production method.
• Option (D) "All of the above" is incorrect because the choice of production technique specifically addresses only one of the central problems.
About This Chapter: Introduction to Business Economics
Paper
Paper 4: Business Economics
Weightage
5%
Key Topics
Meaning, Scope, Price Mechanism
This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.
View Official ICAI SyllabusExam Strategy Tip
Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.
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