Significance of resource pricing and factors determining the resource demand which is different from the factors that determine product demand.

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Answer 1

Question

Chapter 16, Problem 1DQ

To determine

Significance of resource pricing and factors determining the resource demand which is different from the factors that determine product demand.

Expert Solution & Answer

Explanation of Solution

Households own the scarce resources which is their source of income. The resource pricing determines the income of households as firms acquire economic resources and pay as wage, rent, interest and profit to the household for the supply of resources. Resource pricing are the costs for the firm. Firms always desire to minimize the cost and maximize the profit. This in turn, would encourage the firms to efficiently use the scarce resource. Resource pricing helps in determining the allocation of resources in industries and firms.

The demand for products is determined by the income and tastes, whereas the demand for resources is passive based on demand of product that requires particular resources. The demand of resources depends on the demand of product. Unlike product, resources are less mobile. The demand of product is determined by geographic availability of resources. Thus, resources that demand geographically vary affecting the demand of products.

Since the demand for resources depends on the demand for goods and services, it is a derived demand. If there is no demand for goods, then there will no demand for resource too. Also, the demand for resource is determined by the productivity and its price.

If the resource price is low, then the cost of production will be low causing to increase the demand for resources and vice versa. Thus, the demand curve for resource slopes in the downward direction due to the law of diminishing returns.

Economics Concept Introduction

Concept introduction:

Resource pricing: Resource price refers to the pricing of natural and scarce resource for the optimum use.

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Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph. PRICE (Dollars per pen) 10 9 8 co LO 5 + 3 2 1 0 0 1 Price Quantity 2 Equilibrium Object True Scenario 2 3 False Supply 4 5 6 7 QUANTITY (Millions of pens) Demand Scenario 1 8 9 Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that wasn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens. 10 Use the results of your answers on both the Scenario 1 and Scenario 2 graphs to complete the following table. Begin by indicating the overall change in the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the resulting change in the equilibrium price and quantity when supply and demand shift in…

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Answer 2

Question

Chapter 16, Problem 1DQ

To determine

Significance of resource pricing and factors determining the resource demand which is different from the factors that determine product demand.

Expert Solution & Answer

Explanation of Solution

Households own the scarce resources which is their source of income. The resource pricing determines the income of households as firms acquire economic resources and pay as wage, rent, interest and profit to the household for the supply of resources. Resource pricing are the costs for the firm. Firms always desire to minimize the cost and maximize the profit. This in turn, would encourage the firms to efficiently use the scarce resource. Resource pricing helps in determining the allocation of resources in industries and firms.

The demand for products is determined by the income and tastes, whereas the demand for resources is passive based on demand of product that requires particular resources. The demand of resources depends on the demand of product. Unlike product, resources are less mobile. The demand of product is determined by geographic availability of resources. Thus, resources that demand geographically vary affecting the demand of products.

Since the demand for resources depends on the demand for goods and services, it is a derived demand. If there is no demand for goods, then there will no demand for resource too. Also, the demand for resource is determined by the productivity and its price.

If the resource price is low, then the cost of production will be low causing to increase the demand for resources and vice versa. Thus, the demand curve for resource slopes in the downward direction due to the law of diminishing returns.

Economics Concept Introduction

Concept introduction:

Resource pricing: Resource price refers to the pricing of natural and scarce resource for the optimum use.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 16, Problem 1DQ

To determine

Significance of resource pricing and factors determining the resource demand which is different from the factors that determine product demand.

Expert Solution & Answer

Explanation of Solution

Households own the scarce resources which is their source of income. The resource pricing determines the income of households as firms acquire economic resources and pay as wage, rent, interest and profit to the household for the supply of resources. Resource pricing are the costs for the firm. Firms always desire to minimize the cost and maximize the profit. This in turn, would encourage the firms to efficiently use the scarce resource. Resource pricing helps in determining the allocation of resources in industries and firms.

The demand for products is determined by the income and tastes, whereas the demand for resources is passive based on demand of product that requires particular resources. The demand of resources depends on the demand of product. Unlike product, resources are less mobile. The demand of product is determined by geographic availability of resources. Thus, resources that demand geographically vary affecting the demand of products.

Since the demand for resources depends on the demand for goods and services, it is a derived demand. If there is no demand for goods, then there will no demand for resource too. Also, the demand for resource is determined by the productivity and its price.

If the resource price is low, then the cost of production will be low causing to increase the demand for resources and vice versa. Thus, the demand curve for resource slopes in the downward direction due to the law of diminishing returns.

Economics Concept Introduction

Concept introduction:

Resource pricing: Resource price refers to the pricing of natural and scarce resource for the optimum use.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1DQ

To determine

Significance of resource pricing and factors determining the resource demand which is different from the factors that determine product demand.

Expert Solution & Answer

Explanation of Solution

Households own the scarce resources which is their source of income. The resource pricing determines the income of households as firms acquire economic resources and pay as wage, rent, interest and profit to the household for the supply of resources. Resource pricing are the costs for the firm. Firms always desire to minimize the cost and maximize the profit. This in turn, would encourage the firms to efficiently use the scarce resource. Resource pricing helps in determining the allocation of resources in industries and firms.

The demand for products is determined by the income and tastes, whereas the demand for resources is passive based on demand of product that requires particular resources. The demand of resources depends on the demand of product. Unlike product, resources are less mobile. The demand of product is determined by geographic availability of resources. Thus, resources that demand geographically vary affecting the demand of products.

Since the demand for resources depends on the demand for goods and services, it is a derived demand. If there is no demand for goods, then there will no demand for resource too. Also, the demand for resource is determined by the productivity and its price.

If the resource price is low, then the cost of production will be low causing to increase the demand for resources and vice versa. Thus, the demand curve for resource slopes in the downward direction due to the law of diminishing returns.

Economics Concept Introduction

Concept introduction:

Resource pricing: Resource price refers to the pricing of natural and scarce resource for the optimum use.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1DQ

To determine

Significance of resource pricing and factors determining the resource demand which is different from the factors that determine product demand.

Expert Solution & Answer

Explanation of Solution

Households own the scarce resources which is their source of income. The resource pricing determines the income of households as firms acquire economic resources and pay as wage, rent, interest and profit to the household for the supply of resources. Resource pricing are the costs for the firm. Firms always desire to minimize the cost and maximize the profit. This in turn, would encourage the firms to efficiently use the scarce resource. Resource pricing helps in determining the allocation of resources in industries and firms.

The demand for products is determined by the income and tastes, whereas the demand for resources is passive based on demand of product that requires particular resources. The demand of resources depends on the demand of product. Unlike product, resources are less mobile. The demand of product is determined by geographic availability of resources. Thus, resources that demand geographically vary affecting the demand of products.

Since the demand for resources depends on the demand for goods and services, it is a derived demand. If there is no demand for goods, then there will no demand for resource too. Also, the demand for resource is determined by the productivity and its price.

If the resource price is low, then the cost of production will be low causing to increase the demand for resources and vice versa. Thus, the demand curve for resource slopes in the downward direction due to the law of diminishing returns.

Economics Concept Introduction

Concept introduction:

Resource pricing: Resource price refers to the pricing of natural and scarce resource for the optimum use.

Answer 6

Chapter 16, Problem 1DQ

To determine

Significance of resource pricing and factors determining the resource demand which is different from the factors that determine product demand.

Expert Solution & Answer

Explanation of Solution

Households own the scarce resources which is their source of income. The resource pricing determines the income of households as firms acquire economic resources and pay as wage, rent, interest and profit to the household for the supply of resources. Resource pricing are the costs for the firm. Firms always desire to minimize the cost and maximize the profit. This in turn, would encourage the firms to efficiently use the scarce resource. Resource pricing helps in determining the allocation of resources in industries and firms.

The demand for products is determined by the income and tastes, whereas the demand for resources is passive based on demand of product that requires particular resources. The demand of resources depends on the demand of product. Unlike product, resources are less mobile. The demand of product is determined by geographic availability of resources. Thus, resources that demand geographically vary affecting the demand of products.

Since the demand for resources depends on the demand for goods and services, it is a derived demand. If there is no demand for goods, then there will no demand for resource too. Also, the demand for resource is determined by the productivity and its price.

If the resource price is low, then the cost of production will be low causing to increase the demand for resources and vice versa. Thus, the demand curve for resource slopes in the downward direction due to the law of diminishing returns.

Economics Concept Introduction

Concept introduction:

Resource pricing: Resource price refers to the pricing of natural and scarce resource for the optimum use.

Answer 7

Chapter 16, Problem 1DQ

To determine

Significance of resource pricing and factors determining the resource demand which is different from the factors that determine product demand.

Answer 8

Expert Solution & Answer

Explanation of Solution

Households own the scarce resources which is their source of income. The resource pricing determines the income of households as firms acquire economic resources and pay as wage, rent, interest and profit to the household for the supply of resources. Resource pricing are the costs for the firm. Firms always desire to minimize the cost and maximize the profit. This in turn, would encourage the firms to efficiently use the scarce resource. Resource pricing helps in determining the allocation of resources in industries and firms.

The demand for products is determined by the income and tastes, whereas the demand for resources is passive based on demand of product that requires particular resources. The demand of resources depends on the demand of product. Unlike product, resources are less mobile. The demand of product is determined by geographic availability of resources. Thus, resources that demand geographically vary affecting the demand of products.

Since the demand for resources depends on the demand for goods and services, it is a derived demand. If there is no demand for goods, then there will no demand for resource too. Also, the demand for resource is determined by the productivity and its price.

If the resource price is low, then the cost of production will be low causing to increase the demand for resources and vice versa. Thus, the demand curve for resource slopes in the downward direction due to the law of diminishing returns.