Basic Economic Concepts
Our first unit of AP Microeconomics will focus on basic economic concepts like scarcity and opportunity costs. Hopefully, this is going to be a review of the materials that we covered during your junior year in Economics, but it's helpful to rehash it anyway.
For those of you struggling to remember, the video at right does a pretty decent job at explaining the concept of opportunity cost. More to the point, it helps set the stage for what will become your first assignment in this class. (As a reminder, if you forget what is due when, refer to the syllabus and course schedule, both in your binder [hopefully] and on this website.) |
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The cartoon at the left has absolutely nothing to do with opportunity cost. Well, it does have a little bit to do with it. Mostly, I just think it's funny. And I like dogs.
As we discuss opportunity cost and scarcity, think about the things in your own life that are scarce or that you have to make trade-offs for. When I was a teenager, I frequently experienced a scarcity of cash, and I assume many teenagers feel the same way. (Just wait until college.) One important thing to note is that as you're studying economics, you should also be paying attention to economic news around you. Below are some helpful links to get you started. |
A Production Possibilities Curve, or PPC (sometimes PPF, for Frontier) is a simple tool that provides a useful way to look at opportunity cost. Most simply, it shows the tradeoff between two goods (here, X and Y) and how producing more of one good will thus result in producing less of the other.
It's important to remember a few things. First, if you're producing inside the PPC, you're inefficient, and underutilizing your factors of production. If you're on the curve, you're efficient, and if you're beyond the curve, then you're at an unattainable point given current factors or production. You'll need to increase your factors of production in order to shift your curve outward. (Say, buy more machines at the factory, or give your employees an intravenous drip of Mountain Dew to get them fired up.) |
Chapter 4 introduces supply and demand, which, hopefully, is a review of things that we have covered from last year. (Most of this unit should be a refresher for you.) The video below may help jog your memory.
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In addition to the things that we do in class to help you prepare for the test, it may be useful to you to look at the problems on pages 108-110 of your textbook, as these are geared toward the topics that will be covered on your Unit I Test.
In addition, there are various Kahoot! reviews available that you may find helpful. |