The A* algorithm is used to find the shortest path between nodes on a graph. It uses two lists - OPEN and CLOSED - to track nodes. The algorithm calculates f(n)=g(n)+h(n) to determine which node to expand next, where g(n) is the cost to reach node n from the starting node and h(n) is a heuristic estimate of the cost to reach the goal from n. The document provides an example of using A* to solve an 8-puzzle problem and find the shortest path between two nodes on a graph where edge distances and heuristic values are provided.
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