Question

Periods of less than full employment correspond to ____________.

• A. points outside the PPF
• B. points inside the PPF
• C. points on the PPF
• D. none of the above

Answer 1

Answer: (B)

points inside the PPF

Production possibility curve shows the different combinations of the production of two commodities that can be achieved in an economy given the resources and technology, when they are fully utilized. So if an economy is operating inside the PPC it indicates that the available resources are not being fully utilitsed, which reflects a clear case of less than full employment.