how is production possibility curve affected by unemployment in the economy?explain.

how is production possibility curve affected by unemployment in the economy explain
 

massive unemployment does not decrease capacity of an economy to produce so ppc will not shift but economy will operate somewhere inside ppc

no affect on production possibility curve as it is made on the basis of assumption that resources are fully utilised

Massive unemployment does not decrease the capacity of economy to produce so there will be no shift in PPF. However economy will operate at some point inside the PPF due to unutilization of human resources.

the ppc shift backward due to unemployment

A production possibility curve is a graphical representation of the various possibilities of producing two goods in an economy by combining the limited resources available, with the given technology. Unemployment in an economy, refers to any resource that is unemployed, and not put to full utilisation. If there is unemployment of resources in an economy, the economy will still have some resources that would not be fully utilised, and will thus function at a point inside the PPC. Thus, the situation will be represented by a point inside the PPC.

Hello

thuv

thank you shukla ji

It will shift leftwards due to d?crease in resources.??

A production possibility curve is a graphical representation of the various possibilities of producing two goods in an economy by combining the limited resources available, with the given technology. Unemployment in an economy, refers to any resource that is unemployed, and not put to full utilisation. If there is unemployment of resources in an economy, the economy will still have some resources that would not be fully utilised, and will thus function at a point inside the PPC. Thus, the situation will be represented by a point inside the PPC.
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