In an economy, unemployment exists only at points that are on the interior of the production possibilities frontier. True False

True! In an economy, unemployment refers to resources being underutilized, which means that not all labor is being employed to its fullest potential. The production possibilities frontier (PPF) illustrates the maximum output an economy can produce given its inputs. Points on the interior of the PPF show inefficiency, indicating that some resources are idle, thus leading to unemployment. Now, here's a fun thought! If an economy is operating on the PPF, it's like hitting the high score on a video game — you’re maximizing your performance! But when you dip below it, that's akin to leaving a few extra lives on the table that you could have used to level up, meaning you're missing out on potential production and employment!