AP MacroEconomics                 Mr. Crawford

UNIT ONE
FUNDAMENTALS OF ECONOMICS
REVIEW NOTES

Assessment Structure:

  • 40 Multiple Choice questions (1 point each)
  • 1 Brief with Graph (10 points)

Content:
  • ECONOMIC FUNDAMENTALS:
    • SCARCITY
      • CHOICE
    • OPPORTUNITY COST
      • TINSTAAFL
    • PROFIT MOTIVE
      • COST-BENEFIT ANALYSIS
      • MSUW = EUSR
    • RATIONAL THINKING
      • FUTURE INVESTMENT
      • IMPERFECT INFORMATION
    • MARGINAL BEHAVIOR
      • INCENTIVES MATTER
    • TRADE CREATES WEALTH
  • FOUR ESSENTIAL QUESTIONS:
    • WHAT?
    • HOW?
    • WHO?
    • MORE?
  • SIX GOALS
    • GROWTH
    • EFFICIENCY
    • FREEDOM
    • STABILITY
    • SECURITY
    • EQUITY

  • SOCIAL SCIENCE:
    • POSITIVE/OBJECTIVE
      • FACTS
      • THEORY
        • INDUCTION
        • DEDUCTION
    • NORMATIVE/SUBJECTIVE
      • POLICY
      • MACRO/MICRO
    • FALLACIES
      • CAUSATION
      • COMPOSITION
      • DEFINITION
      • BIAS
  • FOUR RESOURCES:
    • LAND
    • CAPITAL
    • LABOR
    • ENTERPRISE
  • THREE SYSTEMS
    • TRADITIONAL
    • MARKET
    • COMMAND
VOCABULARY

SCARCITY
CHOICE
OPPORTUNITY COST
PROFIT
INCENTIVE
POSITIVE/OBJECTIVE
 NORMATIVE/SUBJECTIVE
INVESTMENT
MARGINAL ANALYSIS
 MICROECONOMICS
AGGREGATE
MACROECONOMICS

 DEFINITION FALLACY
BIAS
CAUSATION FALLACY
COMPOSITION FALLACY
 PRODUCTION POSSIBILITIES
SPECIALIZATION
EQUITY
GROWTH
EFFICIENCY
STABILITY
SECURITY
FREEDOM		 UTILITY
RESOURCES
CAPITAL
LAND
LABOR
ENTERPRISE
 FULL EMPLOYMENT
FULL PRODUCTION
TECHNOLOGY
TRADE
CAPITALISM/MARKET
SOCIALISM/COMMAND