Two (2) full practice exams (total of 120 multiple choice questions) 1 year of access for 1 student including special LIVE stream reviews . 1.1 Scarcity. The cheeseburger is your opportunity cost for choosing pizza because it is the next best alternative if your first choice is unavailable. Introductory Materials; Macro Unit 1: Basic Economic Concepts; Macro Unit 2: Supply & Demand ; Macro Unit 3: Intro to Macroeconomic Concepts; Macro Unit 4: Aggregate Demand, Aggregate Supply, & Fiscal Policy; Macro Unit 5: Money & Monetary Policy; Macro Unit 6: Open Economy & International Trade; Macroeconomics Semester Review; AP Microeconomics – S.2. In economics, marginal means additional, or the change in the total (you will see this term a lot!). Scarcity is faced by all societies and economic systems. A company or country can move between the two possibilities to best meet their needs. Start studying AP Macroeconomics Unit 1: Basic Economic Concepts. Soon the Fiveable Community will be on a totally new platform where you can share, save, and organize your learning links and lead study groups among other students!, 2550 north lake drivesuite 2milwaukee, wi 53211. You will learn things like the distinction between absolute and comparative advantage, how to identify comparative advantage from differences in opportunity costs, and how to apply the principle of comparative advantage to determine the basis on which mutually advantageous trade can take place … AP® is a registered trademark of the College Board, which has not reviewed this resource. Scarcity is basically the fact that no one can “have it all;” that is, there are limited goods and services to go around. The table below shows two possible combinations of trucks and cars that can be produced given a set amount of resources. The resources that are scarce in every society are divided into four categories: Trade-offs—each of the alternative choices that you gave up when making a decision. If they were producing at Combo B and moved to Combo A, their opportunity cost would be 8 million cars. For example, adding more workers when production is near 100% will decrease marginal output. It shows us all of the possible production combinations of goods, given a fixed amount of resources. AP Macroeconomics Studyguide Basic Terms for Economics -Economics: the study of how scarce resources are used to satisfy unlimited wants.-Resources: we never have enough to satisfy all of our wants.-Scarcity: the lack of a product or resource.-Shortage: a short term lack of a product or resource.-Necessities: goods which satisfy basic human needs.-Luxuries: goods which consumers want, but … Explain the relationship between scarcity, choices, and trade-offs The entire economic perspective is based on both scarcity and choices. The choices we make are known as trade-offs. Marginal utility is essentially the same thing as marginal benefit. Basically, it is unlimited wants and needs vs. limited resources. In every economy there are three questions that must be answered: The production possibilities curve is the first graph that we study in microeconomics. 1.0 Unit 1: Basic Economic Concepts Scarcity is the basic problem in economics in which society does not have enough resources to produce whatever everyone needs and wants. Learn vocabulary, terms, and more with flashcards, games, and other study tools. 1.2: Resource Allocation and Economic Systems, 1.3: Production Possibilities Curve (PPC), Introduction to the Production Possibilities Curve (PPC), Constant Opportunity Cost vs. Increasing Opportunity Cost, Shifters of the Production Possibilities Curve (PPC), 1.6: Marginal Analysis and Consumer Choice, Centrally-Planned (Command) Economic System, Opportunity Costs/Per Unit Opportunity Cost, 2.6: Market Equilibrium and Consumer and Producer Surplus, 2.7: Market Disequilibrium and Changes in Equilibrium, 2.8: The Effects of Government Intervention in Markets, 2.9: International Trade and Public Policy, Long-Run Decisions to Enter or Exit the Market, Side by Side Graphs in Perfect Competition, Different Types of Short Run Perfectly Competitive Graphs, Shift from Short-Run to Long-Run Equilibrium in a Perfectly Competitive Market, Shift from Long-Run to Short-Run back to Long-Run, Characteristics of Imperfectly Competitive Firms, Characteristics of Monopolistic Competition, Characteristics Compared to Other Market Structures, Sample Free Response Question (FRQ): 2007 Question #3, 5.2: Changes in Factor Demand and Factor Supply, 5.3: Profit-Maximizing Behavior in Perfectly Competitive Factor Markets, Unit 6: Market Failure and the Role of Government, 6.1: Socially Efficient and Inefficient Market Outcomes, 6.4: The Effects of Government Intervention in Different Market Structures. In economics, consumers make rational choices by weighing the costs and benefits. Scarcity is the basic problem in economics in which society does not have enough resources to produce whatever everyone needs and wants. 92% of Fiveable students earned a 3 or higher on their 2020 AP Exams. Khan Academy is a 501(c)(3) nonprofit organization. Going back to the example of what to have for lunch, if you choose pizza but get to the front of the line and the last slice of pizza was taken by the kid in front of you, you choose a cheeseburger instead. Microeconomics vs. Macroeconomics; Factors of Production; Opportunity Costs and Trade-offs; Production Possibilities; 1.2 Opportunity Cost and the Production Possibilities Curve (PPC) Introduction to the Production Possibilities Curve (PPC) 1.3 Comparative Advantage and Trade. Lesson summary: Introduction to Macroeconomics, Introduction to scarcity and the economic way of thinking, PPCs for increasing, decreasing and constant opportunity cost, Production Possibilities Curve as a model of a country's economy, Lesson summary: Opportunity cost and the PPC, Comparative advantage, specialization, and gains from trade, Comparative advantage and absolute advantage, Opportunity cost and comparative advantage using an output table, Input approach to determining comparative advantage, Lesson summary: Comparative advantage and gains from trade, Comparative advantage and the gains from trade, Level up on the above skills and collect up to 300 Mastery points, Change in expected future prices and demand, Changes in income, population, or preferences, Change in demand versus change in quantity demanded, Lesson summary: Demand and the determinants of demand, Change in supply versus change in quantity supplied, Lesson summary: Supply and its determinants, Changes in equilibrium price and quantity when supply and demand change, Lesson summary: Market equilibrium, disequilibrium, and changes in equilibrium, Level up on the above skills and collect up to 400 Mastery points. Start studying AP Microeconomics Unit 1: Basic Economic Concepts. You will learn things like the distinction between absolute and comparative advantage, how to identify comparative advantage from differences in opportunity costs, and how to apply the principle of comparative advantage to determine the basis on which mutually advantageous trade can take place between individuals and/or countries. Complete each of the following tasks with short paragraphs: a. Economics is the study of _____. Circular Flow and FRQ Practice Jacob Clifford San Pasqual High School, Escondido, CA jclifford@euhsd.k12.ca.us Chapter 2 McConnell Brue, 16th Edition The Economizing Problem * * * * C * As consumers, we want to maximize our satisfaction, which is known as utility maximization. Unit 1: Basic Economic Concepts You’ll start the course with an introduction to economic concepts, principles, and models that will serve as a foundation for studying macroeconomics. Macroeconomics Unit 1 - Basic Economic Concepts questionEconomics answerThe science of scarcity and the study of choices questionScarcity answerThe condition in which our wants are greater than out Marginal analysis allows us to explain how consumers make choices about what goods and services to purchase. If you choose to have pizza, then the cheeseburger and chicken sandwich are your trade-offs. For example, whether a high school graduate chooses to go to college or directly into the workforce is a microeconomic decision.‍, Macroeconomics is the branch of economics that studies the behavior and performance of the entire economy instead of just its small parts. AP Macro Unit 1: Basic Economic Concepts Problem Set #1 1. Since we are faced with scarcity, we must make choices about how to allocate and use scarce resources. • Economics is the science of scarcity.

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