Introduction of Micro-Economics — Economics STD 11 Commerce — Question

After deciding the commodity and quantity of production, the economy has to decide that by which method they should produce this commodity because there are several methods and techniques available to produce the same commodity. This problem arises because available resources are limited and have alternative uses. For eg. in re-construction sector we have to choose among labour intensive technique (technique where ratio of labour is more than capital) and capital intensive technique (technique where ratio of capital is more than labour), in agriculture sector we have to make choice between extensive and intensive cultivation. Generally labour surplus economy prefers labour intensive techniques and capital surplus economy prefers capital intensive techniques.