Immobile Factors of Production

Question 1

What is an immobile factor of production?

Answer 1

One that can’t easily be moved to another area of the economy.

Question 2

What is an example of an immobile factor of production?

Answer 2

Land is an immobile factor of production, it cannot be moved from one location to another.

Question 3

Why may land be immobile?

Answer 3

It may only be good for one type of production

Question 4

Why may capital be mobile?

Answer 4

can easily be moved from one location to another

Question 5

Why may capital be immobile?

Answer 5

Due to its size, or its specialist nature.

Question 6

How may land and capital be immobile because of human action?

Answer 6

A farmer may chose not to change the crops he grows on his land despite changes in climate.

Question 7

Why may labour be mobile?

Answer 7

Labour is mobile if workers are able to move from one job to another, this movement may be occupational or geographical areas.

Question 8

Why may labour be immobile geographically?

Answer 8

• Large house price, rent and cost of living differences between areas make it very difficult for workers to move location to obtain work
• There may be high costs involved in moving hosues
• A reluctance to leave family and friends
• A dislike of change
• Imperfect information about the jobs available in different areas.

Question 9

What are the reasons for occupational immobility?

Answer 9

• Lack of training, education and skills required to do a different job
• Lack of training qualifications or required membership of a professional body
• Lack of work experience

Question 10

How does immobility of factors of production contribute to market failure?

Answer 10

• Immobile factors of production mean there is often inefficient use of resources, resources are unused or underused.
• This inefficiency in the allocation of resources mean there is market failure.

Question 11

What is the limit to government intervention in immobility?

Answer 11

There is a limit to how much governments can intervene, as the government cannot move land and most of them can’t force workers to relocate.

Question 12

How may governments tackle labour mobility?

Answer 12

• Improve geographical mobility by offering relocation subsidies or mortgage relief to make moving to a particular area more affordable for workers. ( May also offer incentives to encourage the construction of housing in areas where it’s needed to provide homes for workers)
• To improve occupational mobility governments could provide more training programmes to increase peoples skills.

Question 13

How might the government tackle geographical immobility?

Answer 13

Improve geographical mobility by offering relocation subsidies or mortgage relief to make moving to a particular area more affordable for workers. ( May also offer incentives to encourage the construction of housing in areas where it’s needed to provide homes for workers)

Question 14

How might the government tackle occupational mobility?

Answer 14

• To improve occupational mobility governments could provide more training programmes to increase peoples skills.