Underutilization of Resources
Definition
Underutilization of resources occurs when an economy is not using all of its available resources to their full potential, resulting in inefficiency and a lower level of output than what is possible.
Analogy
Imagine a group project where some members are not contributing their fair share. The project will not reach its maximum potential because some resources (the skills and efforts of those members) are being underutilized.
Related terms
Scarcity: Scarcity refers to the limited availability of resources relative to unlimited wants, which necessitates choices and trade-offs.
Production Possibilities Curve: The production possibilities curve illustrates the different combinations of goods and services that an economy can produce given its available resources and technology.
Efficiency: Efficiency refers to the optimal use of resources in order to maximize output or achieve a desired outcome.
"Underutilization of Resources" appears in:
Study guides (1)
Practice Questions (1)
- Which point on the production possibilities curve represents an underutilization of resources?
Resources
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