Macroeconomics unit 1 study guide basic economic concepts

Capital - all manufactured aids to production tools, machinery, equipment, and factory, storage, transportation, and distribution facilities used in producing goods and services. Labor - physical and mental talents of individuals available and usable in producing goods and services.

Scarcity is the basic problem in economics in which society does not have enough resources to produce whatever everyone needs and wants. Basically, it is unlimited wants and needs vs. Scarcity is faced by all societies and economic systems. Since we are faced with scarcity , we must make choices about how to allocate and use scarce resources. Economics is the study of how individuals, firms, and governments deal with scarcity. 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. The choices we make are known as trade-offs.

Macroeconomics unit 1 study guide basic economic concepts

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Two of the best advantages of the market economic system are that there is a lot of competition and there is a lot of variety provided in the type of goods and services. Equitable distribution of income - try to minimize gap between rich and poor 7.

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All Subjects. AP Microeconomics. Unit 1 — Basic Economic Concepts. Unit 1 Overview: Basic Economic Concepts. Image Courtesy of Pixaby. Introduction to AP Microeconomics Unit 1. Most students are anxious about the level of mathematics needed to be successful in Micro. The AP Microeconomics Exam will not let you use a calculator, and you will need to turn fractions into decimals with the help of your mind and some scrap paper. Students learning calculus are surprised to find how much econ applies concepts of calculus into everyday decisions. You made banana bread; he made calculus.

Macroeconomics unit 1 study guide basic economic concepts

If you're seeing this message, it means we're having trouble loading external resources on our website. To log in and use all the features of Khan Academy, please enable JavaScript in your browser. Donate Log in Sign up Search for courses, skills, and videos. Unit 1. Unit 2. Unit 3. Unit 4. Unit 5. Unit 6. Unit 7.

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Change in the quantity or quality of resources. Some examples of market economies are China and Japan. In economics, the term utility is defined as satisfaction. This indicates that the resources are easily adaptable from the production of one good to the production of another good. We would also determine that Brazil has an absolute advantage in the production of trucks 2 hours is less than 6 hours. Unit 3: Aggregate Demand and Aggregate Supply. If the country illustrated below produces at point B, they will see more economic growth than if they produce at point D. Input problems focus on how much of a resource is needed to produce one unit of a particular good or service. To determine the absolute advantage you are simply looking for which country can produce a higher amount of the good or service. Opportunity Cost can also be determined using a production possibilities table:. Society's material wants, that is, the material wants of its citizens and institutions, are virtually unlimited and insatiable. Several objectives must be satisfied to reach full production: 1 Full employment - use all available resources 2 Full production - use resources efficiently productive efficiency - production in least costly way, allocative efficiency - production of goods and services most wanted by society.

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Microeconomics is the study of how individuals, households, and firms make decisions and allocate resources. How will goods and services be produced? The production possibilities curve can illustrate two types of opportunity costs. If the two countries both can make one unit of the good with the same amount of resources, then we say neither country has an absolute advantage. The concepts of absolute and comparative advantage are used to illustrate how individual countries or entities interact and trade with each other. Comparative Advantage — the ability to produce a good at the lowest opportunity cost. Unit 3: Aggregate Demand and Aggregate Supply. Once you have calculated per unit opportunity cost , the country with the lowest one has a comparative advantage. Course Syllabus. Saylor Direct Credit. Explanation: No matter what decision you make you will have clothing expenses. Unit 4: Aggregate Equilibrium and Economic Growth.