Future Business Leaders of America (FBLA) Agribusiness Practice Test

Disable ads (and more) with a membership for a one time $4.99 payment

Enhance your FBLA Agribusiness knowledge with our comprehensive test. Dive into flashcards and multiple-choice questions, complete with hints and explanations, to ensure exam success. Prepare confidently for a bright future!

Practice this question and more.

What is a key characteristic of a capital-intensive business?

Low overall investment in assets
High output with minimal labor involvement
Greater expenditure in capital than labor
Focus on reduced production costs

The correct answer is: Greater expenditure in capital than labor

A key characteristic of a capital-intensive business is that it incurs greater expenditure in capital than labor. This means that these businesses heavily invest in physical assets such as machinery, equipment, and technology to produce their goods or services. Industries like manufacturing, mining, and telecommunications often require significant upfront capital to establish the necessary infrastructure, leading to high operational costs associated with maintaining and utilizing these assets. In contrast, businesses that do not focus on heavy capital investment may operate with fewer assets and rely more on human labor, which would be characterized by lower upfront costs. Understanding this distinction is crucial as it highlights how capital-intensive businesses operate and the types of resources they prioritize for production.