In a society, people do not want as much corn as the farming units are able to produce together. What does this suggest about the use of resources?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → A part of the resources used for corn could have been used to produce other goods or services in high demand.
What a society produces should match what its people want. If people want less corn than the farms can produce, part of the resources used for corn could have made other goods that are in high demand.
Option (1) The society now has fewer resources than before, so its production possibility frontier has moved inwards. — Incorrect. No resources are lost. The farms can still produce more corn than people want.
Option (2) A part of the resources used for other goods and services should be reallocated to the production of corn. — Incorrect. Moving resources into corn fits the opposite case, when people want more corn than is produced.
Option (3) The farming units should keep producing as much corn as they can and store whatever is not consumed. — Incorrect. Corn that nobody wants uses up resources that could make goods in high demand.
Option (4) A part of the resources used for corn could have been used to produce other goods or services in high demand. — Correct. The extra resources in corn should go to other goods people want.
NCERT (2026-27): “1.1 A Simple Economy … Needless to say that there has to be some compatibility between what people in society collectively want to have and what they produce. For example, the total amount of corn produced by family farm along with other farming units in a society must match the total amount of corn that people in the society collectively want to consume. If people in the society do not want as much corn as the farming units are capable of producing collectively, a part of the resources of these units could have been used in the production of some other good or services which is in high demand. On the other hand, if people in the society want more corn compared to what the farming units are producing collectively, the resources used in the production of some other goods and services may be reallocated to the production of corn. …” |