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Eh just need to clarify this: To move a point within a PPC involves full employment or full utilisation? I was under the impression that full utilisation means producing at max output with the resources u have. Full employment of resources, to my knowledge only means using all the resources but might not be producing max output. Some reference books claim full employment of resources will cause a point in a ppc to move onto the ppc. Some others say full utilisation & full employment. I wonder which is which? Lol.
Please advise. Thanks!
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full employment of resources is the same as full utilisation of resources. They are not different
When there's full employment or utilisation of resources, the economy will be at the edge of the PPC. When there's no full employment or utilisation of resources, the economy will be at a point within the PPC. Hence, if the economy starts from partial employment to full employment of resources, it will move from the point within the PPC to be on the edge of the PPC.
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It is NOT true to say that full employment or full-utlization of resources will always be points on the PPC. A worker can be employed but not being used efficiently will not produce the maximum possible output eg a graduate is employed as a clerk.
Hence, when there is full employment of resouces but if the resources are not used efficiently, it will only be a point inside the PPC and but a point on the PPC.
The PPC is defined as a curve shows the maximum possible combinations of output that can be produced when the country's resources are fully employed and used efficiently at a given level of technology at a given point of time.
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Originally posted by Ahm97sic:
It is NOT true to say that full employment or full-utlization of resources will always be points on the PPC. A worker can be employed but not being used efficiently will not produce the maximum possible output eg a graduate is employed as a clerk.
Hence, when there is full employment of resouces but if the resources are not used efficiently, it will only be a point inside the PPC and but a point on the PPC.
The PPC is defined as a curve shows the maximum possible combinations of output that can be produced when the country's resources are fully employed and used efficiently at a given level of technology at a given point of time.
A worker is a resource
So full employment of resources should also mean that the worker is most efficiently employed. But you are right... I missed one word out, which is efficiency. Efficient use of all resources should be the phrase.But then, these are all theoretical. In the real life, we know this is not always possible.
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