ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Inefficient production implies that the economy could be producing more goods without using any additional labor, capital, or natural resources.

Detailed explanation-2: -When an economy is not using all of its resources, it is producing at a point below its production possibilities frontier. And economy can produce either of these two combinations of good XNY 1000 X and zeroY or 400 Y and 0X. Furthermore the opportunity cost between the two goods is always constant.

Detailed explanation-3: -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.

Detailed explanation-4: -Under utilization of resources means a situation were the resources are in-efficiently used in the production process. A point lying below the production possibility curve (PPC) shows under utilisation of resources or inefficient utilisation of resources.