Macroeconomics unit 1 study guide basic economic concepts

Capital - all manufactured aids to production lawsons auctions, 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. Entrepreneurial ability - the entrepreneur 1 takes the initiative in combining the other resources to produce a good or service. Production Possibilities Curve.

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.

Macroeconomics unit 1 study guide basic economic concepts

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The consumer will spend all of their income.

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All Subjects. AP Macroeconomics. Unit 1 — Basic Economic Concepts. Unit 1 Overview: Basic Economic concepts. To start your study of Economics it is important to understand what the Economic system is about.

Macroeconomics unit 1 study guide basic economic concepts

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.

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If Sylvia took 5 hours off from her job to attend the sporting event, what was her opportunity cost of attending the concert? Also, if an economy favors "future goods" technology; etc. In economics, the term utility is defined as satisfaction. Scarcity is faced by all societies and economic systems. The advantages of this type of economic system are that it has the advantages of a market economy, including being able to distribute goods and services to where they are most needed, and it allows prices to measure supply and demand. Labor — the effort, skills, and abilities that individuals devote to a task for which they get paid. Increasing opportunity costs occurs when you produce more and more of one good and you give up more and more of another good. For example, when an economy chooses between building or fixing roads, or buying textbooks for schools. This is represented by a point on the production possibilities curve that meets the desires and needs of a particular society. To determine absolute advantage , you are looking for the country that uses the least amount of resources i. Prices tend to guide the answers to the questions for whom to produce. In economics, we look at the decision making process through a lens of comparing the benefits we receive from consuming a product or making a decision to the additional costs marginal cost involved in that decision. Here is one other way this concept is tested on the AP Microeconomics exam.

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B fewer buckets of popcorn and more large sodas. Entrepreneurial ability - the entrepreneur 1 takes the initiative in combining the other resources to produce a good or service. Comparative Advantage — the ability to produce a good at the lowest opportunity cost. What goods and services will be produced? Labor — the effort, skills, and abilities that individuals devote to a task for which they get paid. A interest paid on student loans. Economics is the study of how individuals, firms, and governments deal with scarcity. There are two types of problems within these concepts: output and input. Increasing opportunity costs occurs when you produce more and more of one good and you give up more and more of another good. If you choose to have pizza, then the cheeseburger and chicken sandwich are your trade-offs.