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Nihal Singha , asked a question
Subject: Economics , asked on 15/2/14

Explain how production possibility curve is affected when resources are inefficiently employed in an economy.


Vanita Rana , Meritnation Expert added an answer, on 17/2/14
Answer given by Kanupriya is correct. For the diagram, follow the below mentioned link.

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Manpreet Singh , added an answer, on 15/2/14
35 helpful votes in Economics

kanupriya is right... under utilisation of resources / inneffictive use of resources for example when there is unemployment or workers go on strike has NO EFFECT ON THE PPC.. rather the economy produces at a point INSIDE the PPC as the economy is NOT PRODUCING AT ITS FULL POTENTIAL. if question is 3/4 marker... make a diagram and then show the initial and final points of production

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Kanupriya Mehendiratta , added an answer, on 15/2/14
13 helpful votes in Economics

when their is inefficient utilisation of resources in an economy ,there will be no effect on pp curve however production will take place under ther curve

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Sanjana , added an answer, on 15/2/14
5 helpful votes in Economics

When resources are inefficiently employed, the PPC shifts backward..

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