Question

If an economy working at the point left to the production possibility Frontier curve show that? A. full employment. B. unemployment. C. excess production. D. none​

Answer 1

Explanation:

If an economy is working at a point left to PPF curve it shows that the economy is working at less than the full employment level. The PPC shifts towards the left, when there is a technological degradation and/or decrease in resources with respect to both the goods. For example, destruction of resources in an earthquake will reduce the productive capacity and as a result, PPF shifts towards the left.

Answer 2

The correct answer in this case would be option B. or unemployment.

Explanation:

• Production Possibility Curve(PPC) basically shows the various combinations of two goods or commodities than an economy can choose to produce with a specific or limited amount or endowment of productive resources or factors/inputs of production.
• An upward or rightward shift of the PPC indicates higher productive capacity or higher level of production achieved by any economy through expansion of its productive resources or the productive efficiency of the existing factor/input endowment.
• A leftward or downward shift of the PPC implies that the productive resources or overall factor/input endowment in the economy are not fully utilized or employed.Hence,some of the productive resources or factors/inputs of production in the economy are under-utilized or unemployed and hence,the economy is not able to achieve its maximum or optimum productive efficiency which will lead to under-production of the concerned goods and services.