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What is factor intensity?

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nenewilly | Student, Undergraduate | eNotes Newbie

Posted April 8, 2011 at 12:57 AM via web

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What is factor intensity?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted April 8, 2011 at 1:07 AM (Answer #1)

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I assume that you are asking about the use of this term in economics, so I have moved your question to that group and I will answer in those terms.

In economics, the term "factor intensity" refers to the relative proportion of the various factors of production used to make a given product.  In other words, factor intensity looks at how much an industry uses capital, for instance, as opposed to labor. You can compare the factor intensity of various kinds of industries with one another.

As an example, we would say that agriculture is land-intensive relative to manufacturing.  Another way to say this is that it has a higher factor intensity for land than it does for things like labor and capital.   That means that each unit of agricultural product requires more land than each unit of manufacturing product.  By contrast, a highly mechanized industry in a developed country will have a higher factor intensity for capital than a less mechanized industry in a less developed country.

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