CAIE A-Level Business 4.1.3 Capital vs labour intensive
Practise comparing capital and labour intensive operations, then applying benefits and limitations to real business contexts.
- Syllabus
- 2026–2028
- Course
- Business 9609
- Level
- AS
Exam points
- define capital or labour intensive operations using the balance of machinery and workers
- analyse limitations of capital intensive operations, including cost and flexibility effects
- explain benefits or drawbacks of labour intensive operations for customised output
4.1.3—Capital vs labour intensive question 1
[Maximum number: 3]
Explain one benefit to a business of capital intensive operations.
Explain ONE benefit to a business of capital intensive operations.
Indicative content
Responses may include:
AO1 Knowledge and understanding - 1 mark for identifying one benefit to a business of capital intensive operations
- May well lead to economies of scale
- Machines may well guarantee greater conformity of quality
- Machines more efficient than labour
- Production costs reduced
- Reduces need for labour resource
- Increases output/productivity
AO2 Application
2 marks for developed application/explanation of one benefit to a business of capital intensive operations
1 mark for limited application/explanation of one benefit to a business of capital intensive operations
- Substantial opportunities for scale economies - therefore unit cost reductions
- Quality can be standardised so products are the same every time - which reduces human errors and customer complaints
- Machines can work continuously 24 / 7 - therefore increased output enabling large orders to be met
- Less employees are needed - therefore reduced labour/wage costs
- Higher productivity - more effective utilisation of resources
Accept all valid responses.
All question bank results loaded