Derived Demand

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The demand for resources is a derived demand, derived from the products or services which resources help produce. For example, people do not demand acres of land or tractors, but they do demand the food products that are produced. There are several factors that the strength of demand depend on including, productivity of the resource in helping to produce goods and the market value or price of the good. A resource which is highly productive in producing a highly demanded product will be in great demand, while an unproductive resource will be in small demand with each being affected by the law of diminishing returns. In competitive markets, a firm will realize the most profit maximizing combination when each input is employed up to the point at which its price equals its marginal revenue product.

One of the major problems employers are having today is that the young new workforce is taking less rigorous math and science course. This is occurring not just at the college level, but early on. When kids begin to take the alternative math or science that is offered at say the middle school level they are not preparing themselves to take the higher level course later on. This is become a disservice to our young and our economy.

Today's graduates need to be critical thinkers, problem solvers and effective communicators who are proficient in both core subjects and new, 21st century content and skills. These 21st century skills, which are detailed beginning on page 10, include learning and thinking skills, information and communications technology (ICT) literacy skills, and life skills. Twenty-first century skills are in demand for all students, no matter what their future plans — and they will have an enormous impact on students' prospects.

There are wide gaps between the skills that businesses value and the skills most graduates actually have. For example, 80 percent of employers in the fastest-growing industries assess writing as part of the hiring...
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