GENERAL KNOWLEDGE

Detailed explanation-1: -An economy which has abundance of labour supply would choose labour intensive technique as labour will be available at a very cheap cost.

Detailed explanation-2: -A labour surplus economy choose labour intensive techniques and a capital surplus economy choose capital-intensive technique.

Detailed explanation-3: -Labor intensive refers to a process or industry that requires a large amount of labor to produce its goods or services. Labor costs encompass all of the costs necessary to secure the human capital necessary to complete work.

Detailed explanation-4: -In labour intensive techniques more of labour and less of capital (plant and machinery) is used. In capital intensive techniques more of capital (modern plants and machines) is used and less of labour. Degree of capital intensive technique depends on the ratio of labour to capital.