What does the concept of resource immobility imply in the context of factors of production?

• A. All resources are renewable and can be replaced over time.
• B. Resources cannot easily move from one use or location to another.
• C. Resource prices are determined solely by government intervention.
• D. Resources are always perfectly allocated to their most productive use.

Answer: (B)

Verified step by step guidance

1. Understand that 'resource immobility' refers to the difficulty or inability of factors of production (such as labor, capital, or land) to move easily between different uses or locations.
2. Recognize that this concept implies that resources are not perfectly flexible; they cannot be instantly or costlessly reallocated from one industry or geographic area to another.
3. Consider examples such as specialized machinery that only works in one industry, or workers with skills that are not easily transferable to other jobs, illustrating immobility.
4. Note that resource immobility can lead to inefficiencies in the economy because resources may remain underutilized or stuck in less productive uses.
5. Conclude that the correct interpretation of resource immobility is that resources cannot easily move from one use or location to another, which affects how markets and economies adjust to changes.