Business Studies Multiple Choice Question – 25 January 2022

In India, a country with a population of over 1 billion, the agricultural industry is labour intensive.

This is MOST LIKELY to be because?

Select ONE answer:

1. technology is cheap
2. finance is readily available
3. there is no shortage of suitable workers
4. farming is only suited to capital intensive methods

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct – machinery used in agriculture is likely to be expensive or if machinery was cheap this would lead to capital intensive production instead.
2. Not correct – because if finance is available to pay for technology it is more likely to be used.
3. Correct – Labour intensive is where a high proportion of output stems from physical workers not machinery/most costs are from paying wages to employees. India is a country with an abundance of cheap labour so it makes good economic sense to employ it (provides India with a competitive advantage). India has an abundant supply of low skilled workers which should keep labour costs down. The agricultural industry is able to keep its costs down as wage levels are likely to be low.
4. Not correct – although some farming can be done by machinery, the nature of the tasks make it more suitable for labour.

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