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Ch1Sc3
Vocabulary Flashcards
Term | Definition |
---|---|
economic model | simplified representation of economic activities, systems, or problems |
production possibilities curve | a graph used to illustrate the impact of scarcity in an economy |
efficiency | condition where economic resources are used to produce the maximum amount of goods and services |
underutilization | the condition in which economic resources are not being used to their full potential, resulting in fewer goods and services |
law of increasing opportunity | states that as a production switches from one product to another, more resources are needed to increase production of the second product, which causes opportunity costs to rise |