Question

Which statement is false?

A. Land is the primary factor of production used in the production of all goods and services.
B. An entrepreneur combines all the factors of production.
C. Growth in the economy shifts the PPC left.
D. An economy is efficient if it maximizes utilization of all the available scarce resources.

Answer 1

Statement D is false.

An economy is not efficient if it maximizes the use of all the scarce resources available, since by maximizing the use of a scarce resource, it will end and production will suffer due to lack of certain inputs. In short, before a scarce resource one should try to boost the quantity of the scarce product to raise its quantity, and thus be able to produce normally.