What is factor intensity?

Factor intensity can be defined with regards to factor
proportions theory of production and trade, where the factor intensity can be narrowed down to
individual products within an industry or in different industries. Comparisons can then be made
between the different products and the ratio of factors they utilize in their production. The
importance of a factor in different industries is determined by calculating the factor
intensity.

In its simplest form, a product may utilize two factors
in its production, Labor (L) and Capital (K). Thus by obtaining the ratio of capital to labor,
one may determine the intensity of the factors. For
instance,

K1/L1 <
K2/L2

Where K1 and K2 represent the amount of capital
used in the production of item 1 and item 2 respectively.

Where L1
and L2 represent the amount of labor used in the production of item 1 and item 2
respectively.

In this case, we would conclude that item 2 is
capital-intensive which makes item 1, automatically,
labor-intensive.