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 For example, countries can specialize in what they are good at producing and then trade for goods and services that they are not as efficient at. Scarcity is faced by all societies and economic systems. Marginal analysis allows us to explain how consumers make choices about what goods and services to purchase. 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. We assume three things when we are working with these graphs: The concepts of absolute advantage and comparative advantage illustrate how individual countries or entities interact and trade with each other. What is Economics in General? Microeconomics is the study of how individuals, households, and firms make decisions and allocate resources. Complete each of the following tasks with short paragraphs: a. Circular Flow and FRQ Practice Jacob Clifford San Pasqual High School, Escondido, CA [email protected] Chapter 2 McConnell Brue, 16th Edition The Economizing Problem * * * * C * Learn vocabulary, terms, and more with flashcards, games, and other study tools. 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 … As a result of facing scarcity, all members of a society have to make choices in an effort to manage our resources in the most efficient way possible. Economics is the study of _____. Basically, it is unlimited wants and needs vs. limited resources. As consumers, we want to maximize our satisfaction, which is known as utility maximization. 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. Marginal utility is essentially the same thing as marginal benefit. If you're seeing this message, it means we're having trouble loading external resources on our website. • Since we are unable to have everything we desire, we must make choices on how we will use our resources. In economics, marginal means additional, or the change in the total (you will see this term a lot!). 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. It shows us all of the possible production combinations of goods, given a fixed amount of resources. Unit I: Basic Economic Concepts. For example, adding more workers when production is near 100% will decrease marginal output. In every economy there are three questions that must be answered: The production possibilities curve is the first graph that we study in microeconomics. 92% of Fiveable students earned a 3 or higher on their 2020 AP Exams. Basically, it is unlimited wants and needs vs. limited resources. 1.2Resource Allocation and Economic Systems, 2.6Market Equilibrium and Consumer and Producer Surplus, 2.7Market Disequilibrium and Changes in Equilibrium, 2.8The Effects of Government Intervention in Markets, ⚙️ Unit 3: Production, Cost, and the Perfect Competition Model, 3.6Firms' Short-Run Decisions to Produce and Long-Run Decisions to Enter or Exit a Market, 4.1Introduction to Imperfectly Competitive Markets, 5.2Changes in Factor Demand and Factor Supply, 5.3Profit-Maximizing Behavior in Perfectly Competitive Factor Markets, Unit 6: Market Failure and Role of Government, 6.1Socially Efficient and Inefficient Market Outcomes, 6.4The Effects of Government Intervention in Different Market Structures. In this unit, you'll learn fundamental economic concepts like scarcity, opportunity cost, and supply and demand. A company or country can move between the two possibilities to best meet their needs. Scarcity is the basic problem in economics in which society does not have enough resources to produce whatever everyone needs and wants. When they move from Combo A to Combo B, they give up 6 million trucks, which is their opportunity cost for this decision. 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. AP® is a registered trademark of the College Board, which has not reviewed this resource. 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. Opportunity cost and the Production Possibilities Curve, Market equilibrium, disequilibrium, and changes in equilibrium. Our mission is to provide a free, world-class education to anyone, anywhere. Start studying AP Microeconomics Unit 1: Basic Economic Concepts. • Scarcity is the condition in which our wants are greater than our limited resources. 1.2 Resource Allocation and Economic Systems, 1.6 Marginal Analysis and Consumer Choice, Fiveable Community students are already meeting new friends, starting study groups, and sharing tons of opportunities for other high schoolers. In this unit, you'll learn fundamental economic concepts like scarcity, opportunity cost, and supply and demand. 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. Scarcity is basically the fact that no one can “have it all;” that is, there are limited goods and services to go around. Micro Unit 1 & 2: Basic Economic Concepts, Supply & Demand, Elasticity, Taxes & Tariffs, & Consumer Choice Theory There are many similarities in the fist two units of macroeconomics and microeconomics – notably the topics of comparative advantage , the production possibilities curve , and supply and demand will show up in unit 1 and 2. AP Macroeconomics Studyguide Basic Terms for Economics - ... each additional unit produced will decline. , Opportunity Cost—this is the value of the next best alternative when making a choice. play trivia, follow your subjects, join free livestreams, and store your typing speed results. If they were producing at Combo B and moved to Combo A, their opportunity cost would be 8 million cars. *ap® and advanced placement® are registered trademarks of the college board, which was not involved in the production of, and does not endorse, this product. • Economics is the science of scarcity. In economics, utility is defined as satisfaction. The cheeseburger is your opportunity cost for choosing pizza because it is the next best alternative if your first choice is unavailable. 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. Start studying Macroeconomics Unit 1 - Basic Economic Concepts. Learn vocabulary, terms, and more with flashcards, games, and other study tools. The choices we make are known as trade-offs. If you choose to have pizza, then the cheeseburger and chicken sandwich are your trade-offs. If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked. Explain the relationship between scarcity, choices, and trade-offs The entire economic perspective is based on both scarcity and choices. Everything you need to learn and practice for your introductory college, AP, A-Level, or CLEP macroeconomics exams. Level up on all the skills in this unit and collect up to 700 Mastery points!