Multiple Choice
Which of the following is a factor of production that a producer must consider when deciding what good to supply?
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0. Basic Principles of Economics
Factors of Production
Multiple Choice
Which of the following best describes a factor that limits economic growth?
A
Insufficient capital investment
B
Abundant natural resources
C
Technological advancement
D
High levels of skilled labor
Verified step by step guidance1
Step 1: Understand the concept of economic growth, which refers to the increase in the production of goods and services in an economy over time, often measured by the growth rate of real GDP.
Step 2: Identify the key factors that contribute to economic growth, such as capital investment, natural resources, technological advancement, and skilled labor.
Step 3: Recognize that factors which limit economic growth are those that restrict the economy's ability to increase output, such as insufficient capital investment, which means not enough resources are allocated to acquiring machinery, infrastructure, or tools needed for production.
Step 4: Compare the options given: abundant natural resources, technological advancement, and high levels of skilled labor are generally positive contributors to growth, not limitations.
Step 5: Conclude that among the options, 'insufficient capital investment' best describes a factor that limits economic growth because without adequate capital, production capacity cannot expand effectively.
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