Choose appropriate answer:
South African companies are shifting towards, capital intensive
production processes. The reason for such a shift can be explained
by considering…
a) The labour laws of the country
b) The quality of the labour available
c) The prices of the resources available
d) All of the above
Option A is correct because government coult implement a law that you have to hire certain number of labor in your production firm. When you start including capital intensive method of production, there will be rise in unemployment.
Option B is correct because if there is diminishing marginal output from labor, firms will obviosly hire more capital intensive methods.
Option C is correct because firms will install capital intensive methods if these are comparatively cheaper available than labor.
Option D is correct.
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