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Chpt 1 sect 3

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Term
Definition
Production possibilities curve   a graph that shows alternative ways to use an economy's resources  
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Production possibilities frontier   The line on a production possibilities graph that shows the maximum possible output  
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Efficiency   Using resources in such a way as to maximize the production of goods and services  
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Underutilization   Using fewer resources than an economy is capable of using  
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Cost   The alternative that is given up because of a decision  
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Law of increasing costs   law that states that as we shift factors of production from making one good or service to another, the cost of producing the second item increases  
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Created by: acoronado