Unit 1: Basic Economic Concepts
The following topics will makeup approximately 8-14% of the multiple choice questions on the AP Exam.
After completing this unit you must be able to:
- Distinguish between positive and normative statements. (1-1)
- Define scarcity, choice, and cost; define and compute opportunity cost. (1-2)
- Construct and interpret production possibilities schedules and graphs. (1-2)
- Explain how Production Possibilities schedules and graphs show scarcity, choice, and cost. (1-2)
- Distinguish between constant and increasing opportunity costs. (1-2)
- Define and calculate absolute and comparative advantage for production and exchange. (1-3)
- Understand both the input and output methods for determining comparative advantage. (1-3)
- Define specialization and exchange, understand how voluntary exchange (trade) benefits both parties. (1-3)
- Indicate and explain the three primary economic questions facing all nations. (1-7)
- Explain the role of property rights and incentives to a market economy. (1-7)
- Understand the economic way of thinking, apply the principles of marginal analysis. (1-8)
How does economic analysis differ from other kinds of analysis?
What are absolute advantage and comparative advantage? How do these ideas shape production decisions?
What are the differences between positive and normative analysis?
What are the three main economic questions faced by a nation or society?
How are the concepts of scarcity, choice, opportunity cost, and trade-offs interconnected?
Intro, go over AP test format, skim sample AP test questions, look over free response question format.
Think like an economist. Covered the nine concepts of economic thinking. Introduced the PPC and Opportunity Cost. Activity 1-1 in class, Activity 1-2 as HW
Activity 1-2 due. Notes on absolute and comparative advantage. Begin working on Activity 1-3.
Activity 1-3 Due. Review Input method for comparative advantage. Introduce economics system, command vs. free systems. Communism vs. Capitalism. Complete Activity 1-10 in class.
Introduction to marginal analysis. Begin working on Activity 1-11.
In class work on Unit 1 Review. Determine answers in groups. Turn it in at the end of class.
Unit 1 Documents
These documents will be provided at the beginning of each unit. If you lose them it is your responsibility to reprint the necessary pages.