AP Macro 1.1-1.2

Question 1

Economics

Answer 1

Science of scarcity and choices

Question 2

Economy

Answer 2

coordinating production with choices about consumption to distribute goods and services.

Question 3

scarcity

Answer 3

wants > resources

Question 4

command economy

Answer 4

industry is publicly owned and a central authority makes production and consumption decisions
(North Korea)

Question 5

Market Economy

Answer 5

Production and consumption come from decentralized decisions made by firms and individuals. (more chefs in the kitchen)

Question 6

Marginal Analysis

Answer 6

study of costs and benefits of any particular action. Looking for at what point the cost exceeds the benefit of any action

Question 7

Resource

Answer 7

anything scarce that can be used to produce something

Question 8

FOP: Land

Answer 8

anything from nature

Question 9

FOP: Labor

Answer 9

effort (work) done by people

Question 10

FOP: Physical Capital

Answer 10

human made resource

Question 11

FOP: Human capital

Answer 11

skills/knowledge

Question 12

FOP: Entrepreneurship

Answer 12

the ambition to do something new

Question 13

Opportunity Cost (trade off’s)

Answer 13

all the alternatives we give up whenever when choose one action over others

Question 14

Positive Statements

Answer 14

Based on facts, avoids value judgements

Question 15

Normative Statements

Answer 15

Includes value judgments

Question 16

Aggregate Output

Answer 16

total production

Question 17

Price Stability

Answer 17

when overall price level is changing slowly if at all

Question 18

Economics growth

Answer 18

increase in the max amount of goods and services