Question

The Great Depression of the 1930s with a large number of workers and factories unemployedwould be represented in a production possibilities frontier graph by______________. A) a point inside the frontier.B) a point outside the frontier.C) a point on the frontier.D) an intercept on either the vertical or the horizontal axis.

Answer 1

It will be represented by a... (A) point inside the frontier.

Step-by-step explanation:

A production possibility frontier is a curve used to illustrate the maximum output two separate good can achieve in an economy when all its' resources are fully utilized. It is graphically an arc with one good on the X-axis and the other on the Y-axis.

It assumes the production of one good may only increase when the other good decreases due to limited available resources.

Therefore;

Points on the arc shows efficient output combination

Points inside the frontier shows resources are not being fully utilized

Points outside the frontier represent output combinations that has not been attained.

In this Question, unemployment shows not all resources are fully utilized hence it will be represented by a point inside the frontier.