A commercial laundry folds 5,000 towels each week using an automated folding machine operated by two workers. The laundry sells the machine and employs eight more workers so that the same number of towels can be folded by hand.
Which statement correctly describes the laundry's new method of folding towels?
It is labour-intensive, because it uses proportionally more labour than capital
It is labour-intensive, because the workers now take the risk of the business failing
It is capital-intensive, because the same number of towels is still being produced
It is capital-intensive, because the money raised from selling the machine is now capital
77 exam-style questions on OCR GCSE Economics 1.1 Main economic groups and factors of production, covering 1.1.1 Role of main economic groups and 1.1.2 Factors of production. Each one has a worked solution and a mark scheme showing where the marks go.