UNEMPLOYMENT, PRODUCTION POSSIBILITIES: Unemployment is the condition that exists when some available resources are NOT engaged in the production of goods and services. In other words, some resources that could be used for production are not being used. This is indicated in production possibilities analysis by producing a combination of goods that places the economy inside the production possibilities curve.
Unemployment means resources that could be used for production are not being used. And when some resources are not being used for production, the economy does not reach the production possibilities curve--the curve that corresponds to full employment. In particular, unemployment results from any point INSIDE the production possibilities curve. To illustrate this, use the mouse arrow to point out unemployment as all points, including L, that lie INSIDE this curve for the production of crab puffs and storage sheds. However, you might also note that points D and J on the boundary of the production possibilities curve achieve full employment. In addition, note that point M is not attainable with existing resources and technology. Check Out These Related Terms... | full employment, production possibilities | derivation, production possibilities curve | slope, production possibilities curve | opportunity cost, production possibilities | investment, production possibilities | economic growth, production possibilities | economic growth, sources | law of increasing opportunity cost | Or For A Little Background... | full employment | production possibilities | production possibilities curve | assumptions, production possibilities | technical efficiency | graphical analysis | unemployment | And For Further Study... | economic efficiency | efficiency | economic goals | seven economic rules | free lunch | three questions of allocation | four estates | government functions | political views | unemployment rate | macroeconomic problems | unemployment problems | recessionary gap | Recommended Citation: UNEMPLOYMENT, PRODUCTION POSSIBILITIES, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: December 16, 2025]. |
