Question

Factor intensity oriented projects are

• A. Capital oriented projects
• B. Labour based projects
• C. Technology oriented projects
• D. Both (A) and (B)

Hint:

Remember the main factors of production: Labour and Capital. "Factor intensity" simply asks which of these two is the dominant input for a particular project or industry.

Answer 1

The Correct Option is D

Step 1: Understanding the Question:
The question asks for examples of 'Factor intensity oriented projects'.
Step 2: Key Concept:
In economics and business, 'factors of production' are the inputs used to produce goods and services. The primary factors are Land, Labour, and Capital. 'Factor intensity' refers to the relative proportion of these factors required for a project. A project is oriented towards the factor it uses most intensively.
Step 3: Detailed Explanation:
Let's analyze the options based on this concept:

(A) Capital oriented projects: These projects are 'capital-intensive', meaning they require a large amount of investment in machinery, equipment, and technology relative to the amount of labor. This is a type of factor intensity orientation.

(B) Labour based projects: These projects are 'labour-intensive', meaning they require a large amount of human labor relative to the amount of capital. This is another type of factor intensity orientation.

(C) Technology oriented projects: Technology is often considered a component of capital (intellectual and physical capital). A technology-oriented project is typically a capital-intensive project.

Since 'factor intensity' refers to the dominant factor of production, and both capital and labor are primary factors, projects oriented towards either are examples of factor intensity oriented projects.
Step 4: Final Answer:
Both Capital oriented and Labour based projects are classified based on factor intensity. Therefore, the correct answer is (D) Both (A) and (B).