Question

Unemployment would cause an economy to
A) produce outside its production possibilities frontier
B) produce inside it's production possibilities frontier
C) produce on it's production possibilites frontier
D) All of the above

Answer 1

Ahoy dear ^_^

《 ANSWER 》

Option A. produce outside its production possibilities frontier ✔✔

Unemployment would cause an economy to "produce outside its production possibilites frontier".

Hope it helps you out ^_^

Answer 2

The correct answer is option B) produce inside its production possibilities frontier.

The production possibilities frontier is a graph that displays the combination of outputs,  that an economy can produce under various possibilities for the given or available factors of production.

In case of unemployment, the graph represents the goods that could be produced but are not being produced in the economy. Hence, when resources are not used, the production cannot reach the curve of the graph.