Different between factor abundance and factor intensity
Answers
Answer:
Factor intensity measures how the factors of production that is land, labor ,capital and entrepreneurship is allocated among the various sectors in the economy. Factor abundance on the other hand measures the availability of factors of production.
♤Different between factor abundance and factor intensity♤
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About Abundance :---
Factor abundance is the resource richness of nations. In a two-factor model, where the factors are capital and labor, the factor abundance of one nation is defined by the relative endowment of capital to labor in the nation relative to another nation or nations. The relative aspect of factor abundance is important.
About Intensity :-----
Factor intensity. The relative importance of one factor versus others in production in an industry, usually compared across industries. Most commonly defined by ratios of factor quantities employed at common factor prices, but sometimes by factor shares or by marginal rates of substitution between factors.
♤Extra Note :------♡
(a) Factor intensity measures how the factors of production that is land, labor ,capital and entrepreneurship is allocated among the various sectors in the economy. Factor abundance on the other hand measures the availability of factors of production.