Question

If you have traveled in a foreign country, would your observations confirm the view that the country's demand patterns reflect consumer preferences in that country for goods produced with the country's relatively abundant factor of production? Please explain in 250-300 words.

Answer 1

It is not possible to analyse the demand pattern of the country just by one visit. There so much more to understand about the demand pattern of the customer and supply pattern of the producers.

In order to observe that the country's demand patterns reflect consumer preferences in that country for goods produced with the country's relatively abundant factor of production, there are certain factors that has to be considered.

1. Demand pattern of the customer
2. Supply patter of the sellers
3. Amount of resources available in the country.
4. Technology used in the country
5. Working class of the country
6. Consumption rate
7. Savings rate
8. Investment rate
9. Inflation rate
10. Unemployment rate

All these factors have to be considered in order to determine whether the country is able to satisfy the demands of the consumers using proper resources. For example, we have to analyze countries resources and their quantities in order to ensure that the country is not going towards scarcity and is able to satisfy the unlimited demands of the people without creating the problem of scarcity. Another example: consumption rate is important to determine in order to understand the preference of the consumers. Consumption rate is affected by factors such as income of te consumer and their Employement Category.

After a thorough analysis of all these factors, an individual will be in a position to determine whether country's demand patterns reflect consumer preferences for goods produced with the country's relatively abundant factor of production

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