igcse济学第一单元生产要素需求.pdfVIP

DEMANDFORFACTORSOFPRODUCTION By of this unit, students will be able to ex in: •Why different combinations of the factors of production might be used and the terms labour intensive and capital intensive. •What is meant by factors of production being substitutes or complimentary. •What is meant by the short run and long run for factors of production. •What might change the demand for factors of production. WHAT FACTORSOFPRODUCTIONARE EMPLOYED What are the different factors of production? Different firms and industries will employ a different combination of capital, labour, and capital. The best combination of factor inputs will depend on the product being produced and the relative cost and efficiency of the factors of production. For example, a technologically modern car factory is likely to employ a large amount of capital and a relatively smaller amount of labour – car production is very capital intensive. ontrast, a business such as a hairdressing salon is likely to be more labour intensive. WHAT FACTORSOFPRODUCTIONARE EMPLOYED •The combination of factors of production will also depends on the relative productivity and cost of the factors of production. •As the productivity of machinery/capital reases, firms might try to re ce labour with machinery – ing more capital intensive. •However, ountries where labour is very cheap, firms might prefer to use less machinery and more labour – production ountries with chea bour tends to be labour intensive. • Here we can see that capital and labour are often substitutes for each other. WHAT FACTORSOFPRODUCTIONARE EMPLOYED •However, they are only substitutes when both labour and capital can produce the same product/service. It is not possible or efficient to re ce the capital required to produce certain outputs. For example, no amount of additional labour can re ce an air ne as a piece of capital, just as capital is unlikely to re ce a b