Question

In any city at any time, some of the stock of usable office space is vacant. This vacant office space is unemployed capital. How would you explain this phenomenon? is it social problem?

Answer 1

If you think of a production possibilities boundary, that would be a point inside the curve. It is an inefficient (i.e., incomplete) use of resources. It is not productively efficient, as one could produce more with no opportunity cost.

Is it a social problem? That depends. If it is just "the way it is," then I'd argue it's not something to be concerned with. Most economists would argue that unemployment can never get to zero, and there is therefore an "acceptable" amount of unemployment. If it *can* be improved, then perhaps it is a social problem. That will be for you to decide.