Transcription of AP Economics Microeconomics – Unit 1: Basic Economic ...
1 AP Economics Microeconomics unit 1: Basic Economic Concepts unit Exam Review Exam Information: - 2 Sections: Multiple Choice (20 questions) and Free Response Questions (1 long answer, 2 short answer) - Time Limits: Multiple Choice (25 minutes) and FRQ s (50 minutes) - Point Values: Multiple Choice (1 point each) and Long Answer FRQ (10 points) and Short Answer FRQs (5 points each) - Out of 100% - earned points divided by total points (40 points) unit 1 Exam is on the following subjects: 1. Scarcity a. What is scarcity? b. What role does scarcity play in the formation of Economic systems? c. What makes a resource scarce? 2. Opportunity Costs a. What are opportunity costs? b. How do we determine the opportunity cost of a good or service or course of action? c. What role do opportunity costs play in the evaluation of comparative advantage and marginal benefits/marginal costs? d. What role do opportunity costs play in analyzing the production possibilities curve?
2 3. Economic Systems a. What are the 5 fundamental questions addressed by all Economic systems? b. How are resources allocated in a market economy? A command economy? c. What is the invisible hand as describe by Adam Smith? d. What is the Circular Flow Model? e. What are factor or resource markets? What are product markets? 4. Production Possibilities Curve a. How is the production possibilities curve created? b. What are the elements of a graph which illustrates the production possibilities curve? c. What factors can cause changes to the shape of the production possibilities curve? d. What factors can shift the production possibilities curve? e. What causes movement along the production possibilities curve? f. How are opportunity costs related to movement along the production possibilities curve? 5. Marginal Benefit/Marginal Cost/Marginal Analysis a. How do opportunity costs play a role in marginal analysis?
3 B. What do we mean by marginal benefits? Marginal costs? c. How does marginal analysis influence people s choices? 6. Incentives a. What role do incentives play in a market economy? b. How did the lack of incentives help to bring about the failure of command economies? c. What are property rights? 7. Comparative and Absolute Advantage a. What is the difference between comparative and absolute advantage? b. How do we determine absolute advantage? c. How do we determine comparative advantage? d. How does comparative advantage determine the specialization of people/firms/nations? FRQ s 1. Long answer will include drawing a graph and explaining your analysis of the graph. 2. Short answers will include analysis of data and using the data to formulate an answer.
