Advantages of Labour- vs. Capital-Intensive Production

Steps:

• Define labour-intensive production as relying on human workers for flexibility and customization.
• Define capital-intensive production as using machinery for efficiency and scale.
• Identify key advantages: labour allows individualized items; capital lowers average costs via automation.
• Match advantages to option A, which pairs them correctly without mixing disadvantages.

Why A is correct:

• Labour-intensive enables bespoke production (e.g., handmade crafts), while capital-intensive reduces average costs through economies of scale, as per production theory.

Why the others are wrong:

• B: "Keeps unemployment down" fits labour-intensive, but "fixed costs are high" is a disadvantage of capital-intensive.
• C: "Workers have pride" is a labour advantage, but "machinery may break down" is a capital disadvantage.
• D: "Workers have to work hard" is a labour drawback, and "ready market" is unrelated to production type.

Final answer: A