What is factor intensity?

Factor intensity refers to the relative amounts of different factors of production that are used in the production of goods and services. Specifically, it typically involves comparing the quantity of one input—such as labor or capital—relative to other inputs. This concept is crucial in understanding how different industries and production processes utilize their resources.

By assessing factor intensity, economists can analyze which factors are predominant in producing a particular good. For instance, a production process that utilizes a large amount of capital relative to labor is considered capital-intensive, whereas one that relies more on labor is deemed labor-intensive. This comparative understanding helps in explaining production choices, cost structures, and even the implications for trade and economic policy.

The other options, while related to aspects of production, do not capture the essence of factor intensity. Total production output describes the end result of production but does not focus on the comparative use of factors. The total supply available for production refers more to the overall availability of resources, excluding comparisons between them. Lastly, technological advancement in production relates to improvements in production processes and efficiency, rather than to the specific characteristics of how much of each factor is used in production.