Ch 1 Section 3 Production Possibilities Curves – Flashcards

exchanging one thing for another; the alternate that we sacrifice when we make a decision

a graph or economic model that shows the maximum combinations of goods and services, any two categories of goods, that can be produced from a fixed amount of resources

the line on a production possibilities graph that shows the maximum possible output

using resources in such a way as to maximize the production of goods and services

An economy that is not using all its resources to gain the maximum possible production is.

to an economist the alternative that is given up because of a decision

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