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.
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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.