3. The demand for resourcesa. You are an Economics teacher.Please explain to your class the significance of resource pricing on resource allocation among: i. Firms and industries,

ii. The determination of income,

iii. Include the impacts on the ability of a firm to achieve cost minimization.

1. Discuss how resource prices affect the ability of firms in an industry relative to their ability to acquire resources and the subsequent impact on output,2. Discuss the impact of resource prices on the determination of income that results from the sale of those resources. 3. Discuss the impact of resources prices on the ability of firms to minimize costs.

b. Explain to the class the marginal productivity theory of resource demand and why businesses care about it.

i. State the assumptions ii. Explain MRP and MRC, and the firms' rule for employing resources iii. Be sure to explain the terms and what they mean to a business.

c. Explain the determinants of resource demand.

i. Discuss the 3 determinants of resource demand

1. Changes in product demand

2. Changes in productivity

a. Quantities of other resources

b. Technological advance

c. Quality of the variable resources

3. Changes in the prices of other resources including:

a. The case of substitute resources - the substitution effect and the output effect

b. The case of compliments