If an economy is operating on its production possibilities frontier (PPF), are there any unemployed resources in the economy?
A)Yes, because if there weren't any unemployed resources the economy would be producing beyond its PPF.
B)No, because if there were any unemployed resources the economy would be producing below its PPF.
C)It depends on whether the economy's PPF is a concave (downward-sloping)curve or a straight line.
D)Yes, because there are always some natural resources that are unemployed.

Question

Quizplus · Accepted Answer

If the economy is operating on its PPF, it means it is producing at its maximum efficiency level. This implies that all resources in the economy are being used to produce goods and services. Therefore, there are no unemployed resources in the economy. If there were any idle resources, then the economy would be producing below its PPF. Thus, option B is the correct answer.

If an Economy Is Operating on Its Production Possibilities Frontier