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 theory of expected utility theory
A) predicts all actions involving uncertainty. B) predicts no actions involving uncertainty. C) predicts some, but not all, actions involving uncertainty. D) predicts only one in three actions involving uncertainty.
If an industry is a constant-cost industry
a. prices of its inputs increase even though output remains constant b. it uses inputs at higher levels of output c. prices of its inputs rise at a constant rate as it uses more inputs d. prices of its inputs remain constant as the number of firms increases e. firms in the industry experience economies of scale
If the price system is allowed to function without interference and a surplus occurs, quantity demanded will _____________ and quantity supplied will _____________ until the price falls to its equilibrium.
A. rise; rise B. fall; fall C. rise; fall D. fall; rise
A minimum wage law is a:
A. quantity restriction. B. customary norm without legal structure or protection. C. price ceiling. D. price floor.