The most important way in which inefficiency occurs is
A)producing more military goods instead of civilian goods.
B)limiting economic growth by limiting capital spending.
C)unemployment of labor and other resources.
D)producing outside the production possibilities frontier.
E)All of the above are correct.

Question

Quizplus · Accepted Answer

Unemployment of labor and other resources is the most significant way in which inefficiency occurs as it represents a waste of resources that could be used to produce goods and services. When resources are not fully utilized, economic output is reduced, and economic welfare is diminished. In contrast, producing more military goods instead of civilian goods (A), limiting capital spending (B), or producing outside the production possibilities frontier (D) are all examples of inefficiency, but they are not as fundamental as unemployment of resources.

The Most Important Way in Which Inefficiency Occurs Is