If an economy is operating inefficiently, then
A)the economy can increase production of consumption goods without reducing capital goods.
B)there is always a positive opportunity cost to increasing output.
C)output can only be increased through capital investment.
D)output cannot be increased.

Question

Quizplus · Accepted Answer

If an economy is operating inefficiently, it means that resources are not being utilized to their full potential. Therefore, increasing the production of consumption goods can be achieved without reducing the production of capital goods. This is because the economy has the spare capacity to produce more without sacrificing the production of capital goods.

If an Economy Is Operating Inefficiently, Then