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Chapter1, Section3
Production Possibilities Curves
Term | Definition |
---|---|
Production Possibilities Curves | A graph that shows alternative ways to use an economy's productive resources. |
Production Possibilities Frontier | On the graph, it is the line that is drawn connecting the values of both items produced. |
Efficiency | Using resources in such a way as to maximize the production of goods and services. |
Underutilization | Using fewer resources than an economy is capable of using. |
Cost | Is the alternative given up when we choose one option over the other. ( This is not necessary money) |
Law of Increasing Costs | As production switches from one item to another, more resources are necessary and cost of producing the second item increases. |