Home » Eng Accounting » F » Factor intensity

Factor intensity

The relative proportions of various factors of production used in producing goods and services. The factor intensity of the techniques of production chosen by a cost-minimizing firm depends on the relative prices of different factors of production. For any given set of relative factor prices, some goods are produced with a low capital-labour ratio: such goods are labour-intensive. Others are produced with a high capital-labour ratio: such goods are capital-intensive. Agricultural goods may be produced using a significant input of land and relatively few other inputs: such products are land-intensive.

Reference: Oxford Press Dictonary of Economics, 5th edt.