Question 1

The term resource mobility describes the assumption that a resource removed from one industry can be moved to another.

Resource mobility refers to the flexibility of resources, such as labor and capital, to be transferred from one industry or sector to another. This concept is crucial in understanding how economies can adapt to changes in demand and supply across different markets.

A) An economic condition in which a nation exports more than it imports

This option describes a trade balance situation known as a trade surplus, which is unrelated to the concept of resource mobility. Resource mobility focuses on the movement and allocation of resources rather than trade dynamics.

B) The assumption that a resource removed from one industry can be moved to another

This statement accurately defines resource mobility. It emphasizes the ability of resources to be reallocated between different industries, thus allowing for efficient utilization based on market needs and economic conditions.

C) The idea that market forces should determine how much to trade with little or no government intervention

While this option refers to free trade principles, it does not capture the essence of resource mobility. Resource mobility pertains specifically to the transferability of resources, not the broader trade policies or market dynamics.

D) The idea that governments should actively defend domestic industries from imports and vigorously promote the export of resources

This option describes protectionist policies rather than resource mobility. Resource mobility focuses on how resources can shift between industries, not on government intervention in trade practices.

Conclusion

The correct answer, B, highlights the key principle of resource mobility, which is the transferability of resources between industries. The other options fail to address this core concept, instead discussing trade balances and government policies that do not pertain to the movement of resources within an economy. Understanding resource mobility is essential for analyzing how economies can adapt and thrive in changing conditions.