Question

Natural resources are often called wasting assets because it is difficult to use the assets in an efficient manner

a. true
b. false

Answer 1

Allocative inefficiency is wasteful because resources are not allocated in a way that maximizes the satisfaction of people's wants and needs.

Step-by-step explanation:

Allocative inefficiency is also wasteful because it occurs when resources are not allocated in a way that maximizes the satisfaction of people's wants and needs. In other words, it is the inefficient allocation of resources to produce goods and services that are not in high demand or are not valued by society. For example, if a country allocates a significant portion of its resources to producing luxury goods for the wealthy minority, while neglecting essential goods and services for the majority, it would result in allocative inefficiency and wasted resources.