Why do resource demand curves slope downward

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1. What is the significance of resource pricing? Explain how the factors determining resource demand differ from those determining product demands. Explain the meaning and significance of the fact that the demand for a resource is a derived demand. Why do resource demand curves slope downward?

2. In 2005 General Motors (GM) announced that it would reduce employment by 30,000 workers. What does this decision reveal about how it viewed its marginal revenue product (MRP) and marginal resource cost (MRC)? Why didn't GM reduce employment by more than 30,000 workers? By less than 30,000 workers?

3. Florida citrus growers say that the recent crackdown on illegal immigration is increasing the market wage rates necessary to get their oranges picked. Some are turning to $100,000 to $300,000 mechanical harvesters known as trunk, shake, and catch pickers, which vigorously shake oranges from trees. If widely adopted, what will be the effect on the demand for human orange pickers? What does that imply about the relative strengths of the substitution and output effects?

Reference no: EM13335466

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