Explanation: According to the given question, the resources are allocated for increase the production of the products and the resources are said to be efficient. The allocation of the resources are distributed in the form of input and output by changing the economy.
What is the use of fewer resources than the economy is capable of using?
Sometimes an economy works inefficiently and it uses fewer resources than it is capable of using. This is known as underutilization.
How can we minimize the problem of scarcity?
If we only had more resources we could produce more goods and services and satisfy more of our wants. This will reduce scarcity and give us more satisfaction (more good and services). All societies therefore try to achieve economic growth. A second way for a society to handle scarcity is to reduce its wants.
When can an economy increase the production of one good without reducing reducing the output of another?
An economy can increase the production of one good without reducing the output of another good if: there are no unemployed resources and the economy is operating within the production possibilities frontier. there are no unemployed resources and the economy is operating outside the production possibilities frontier.
What is the impact of underutilization of resources?
What is the impact of underutilization or resources? It can result in a person/country spending more money,time,and effort than they would if they just used the resources that are readily available.
What conditions must be present for productive efficiency?
A firm is said to be productively efficient when it is producing at the lowest point on the average cost curve (where Marginal cost meets average cost). Resources are allocated to the best interest of society, maximum social welfare and maximum utility.
How do prices allocate scarce resources efficiently?
Markets use prices as signals to allocate resources to their highest valued uses. Consumers will pay higher prices for goods and services that they value more highly. Producers will devote more resources to the production of goods and services that have higher prices, other things being equal.
What is a primary value of the rule of supply and demand?
The law of supply and demand is a theory that explains the interaction between the sellers of a resource and the buyers for that resource. Generally, as price increases, people are willing to supply more and demand less and vice versa when the price falls.
