Excessive unemployment of resources is illustrated using a production possibilities curve by:
A)an inward shift of the curve.
B)an outward shift of the curve.
C)a movement along the curve in a northwest direction.
D)a point inside the curve.

Question

Excessive unemployment of resources is illustrated using a production possibilities curve by:
A)​an inward shift of the curve.
B)​an outward shift of the curve.
C)​a movement along the curve in a northwest direction.
D)​a point inside the curve.

Quizplus · Accepted Answer

Excessive unemployment of resources is indicated by a point inside the production possibilities curve, as it shows that the economy is producing below its productive capacity. An outward shift of the curve would indicate an increase in the economy's productive capacity, while an inward shift would indicate a decrease. A movement along the curve in a northwest direction would represent a trade-off between producing more of one good at the expense of producing less of the other.

Excessive Unemployment of Resources Is Illustrated Using a Production Possibilities