Why aren’t the tools of product market analysis directly applicable to the resource market?
What will be an ideal response?
The demand for resources is a derived demand, that is, it is derived from the demand for the products that these resources produce. The demand side of the resource market must be analyzed from that indirect perspective.
Another distinction between the product and resource markets is on the supply side. Some resources, especially land, are essentially fixed in quantity. Other resources, particularly labor, are not always mobile and again the quantity cannot always be varied. In addition to these complexities, resource markets tend to be more subject to institutional forces including the policies and practices of governments, labor unions, and business organizations.
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The demand for sirloin steak is probably more elastic than the demand for all meat because
A) steak is very expensive. B) people are worried about cholesterol. C) cattle raising is not very profitable. D) there are more substitutes for sirloin steak than for all meats.
Foreign direct investment outflows have a positive impact on workers in the home country.
Answer the following statement true (T) or false (F)