Question

The supply of land \((\mathrm{LO1})\) a) is fixed b) varies from time to time c) rises with demand d) is higher in urban areas than in rural areas

Short answer

The supply of land (LO1) is fixed because it is an immovable resource with a finite amount available. Hence, the correct answer is option a).

Step-by-step solution

Option a: Is fixed

The supply of land is considered to be fixed because there is a finite amount of land available. Land is an immovable resource, so its supply cannot be increased or decreased by the actions of individuals or governments. Therefore, option a) is correct.

Option b: Varies from time to time

The supply of land does not vary from time to time. As mentioned before, land is an immovable resource with a fixed supply. No matter the time or period, the total amount of land remains the same. Hence, option b) is incorrect.

Option c: Rises with demand

Although the price of land may rise with an increase in demand, the supply of land does not rise along with demand. Due to its fixed nature, an increase in demand might drive up land prices in certain areas, but it will not result in an increase in the supply of land. Therefore, option c) is incorrect.

Option d: Is higher in urban areas than in rural areas

The supply of land does not depend on whether it is an urban or rural area. Since the supply of land is fixed, the amount of available land is not dependent on its location. This option is also incorrect because it confuses supply with the price of land. In reality, the price of land is generally higher in urban areas than in rural areas due to the higher demand, but the overall land supply remains constant. In conclusion, the correct answer to the question is: a) The supply of land (LO1) is fixed

Key concepts

Fixed Resource

Land is a classic example of a fixed resource. This means that the total amount of land available on earth is limited and cannot be increased by any human means. When we say that land is a fixed resource, we are emphasizing its unchangeable nature in terms of total quantity.
- Because the Earth's surface is what it is, land cannot be created or destroyed - This finite supply has implications for land use and economics because it forces society to make the most of what is available - Land's fixed nature can affect real estate prices, agricultural use, and development planning
It is important to understand that though the use of land can vary, the overall supply is unchangeable. This characteristic makes land distinct from resources that can be manufactured or extracted in greater quantities, like coal or steel.

Land Economics

Land economics is a fascinating field that studies how land is used and valued. It looks at how the fixed nature of land supply influences decisions about land use and management.
- Land economics involves analysis of the economic factors affecting land use, such as location, demand, and the regulatory environment - It examines how land's immovable and fixed nature influences market prices and investment strategies - Economists in this field study market trends to understand how demand impacts land values, despite the invariant supply
This field is crucial for planning, development, and policy-making, enabling better management of limited resources for sustainable development. Understanding land economics provides insights into urban planning, real estate investment, and environmental policy.

Immovable Resource

Land is characterized as an immovable resource, meaning it cannot be transported from one location to another. This quality has several important implications.
- Unlike resources such as water or timber, which can be relocated, land remains fixed in place - This immobility leads to distinctions in economic value based on location; for example, city land is typically more valuable due to limited space and high demand - The immobility of land often results in long-term impacts on infrastructure and community development, as areas cannot shift from one location to another
The immovable nature of land means its value is heavily influenced by its geographic attributes, accessibility, and surrounding environment. Recognizing this helps in effective planning and maximizing land use efficiently.