Final answer:
Labor is the factor of production that is under-utilized when unemployment is a problem.
Step-by-step explanation:
The factor of production that is being under-utilized when unemployment is a problem is labor.
Unemployment occurs when there are people in the workforce who are willing and able to work but are unable to find employment. This means that the labor resource is not fully utilized in the production of goods and services. When there is high unemployment, it indicates that there is a surplus of labor, and this factor of production is being under-utilized.
For example, if there are many unemployed workers in a country, it means that their skills and abilities are not being fully utilized in the economy, leading to a loss in potential output and economic growth.