Question

Which best describes the role the availability of resources plays when a company is considering whether to produce a certain good?

Resources can always be obtained, no matter what the cost.
If a resource is difficult to obtain, production costs will be high.
Resources play no part in a company’s decision to produce a good.
If a resource is easy to obtain, production costs will be high.

Answer 1

If a resource is difficult to obtain, production costs will be high.

Scarce or hard-to-get inputs raise costs (higher purchase price, search, or transport), which affects whether producing the good is profitable. Conversely, easily available resources lower costs.