If there is unemployment and all businesses are operating at less than full capacity, then
A) there are too many workers, and some people ought to leave the labor force.
B) we are not experiencing a net social cost to unemployment because it is offset by the capacity levels of the factories.
C) society is producing inside its production possibilities curve.
D) society is at the wrong point on the production possibilities curve.

Question

Quizplus · Accepted Answer

When there is unemployment and businesses are operating below full capacity, it means that not all available resources (labor and capital) are being utilized efficiently. This situation indicates that society is producing inside its production possibilities curve, which represents all possible combinations of two goods that can be produced with available resources and technology when those resources are fully and efficiently utilized.

If There Is Unemployment and All Businesses Are Operating at Less