Question

Any point __________the frontier (curve) describes an economy with Unemployment or Under-employment of one or more of the four basic resources.

Answer 1

The correct answer is below the production possibility frontier.

Step-by-step explanation:

The production possibility curve or frontier shows the different bundles of maximum possible combination of goods that can be produced using the given resources.

The points on the frontier show the efficient bundles as all the resources are being consumed. The points above the frontier show unattainable bundles as they need more resources.

The point below the frontier is attainable but inefficient as all the resources are not being used. These points show unemployment or underemployment of resources as excess resources are left unused.