Unit 1 Basic Economic Concepts
Emphasize scarcity, choices, and opportunity cost. Introduce economics vocabulary, positive and normative statements, and factors of production.
Scarcity is the basic problem that gives rise to economics.Investopedia
1.2 Opportunity Cost and Production Possibilities Curve
The first graph! Explore how the PPC shows:
- opportunity cost
- resource allocation
- underutilized resources
- economic growth/contraction
As a good introduction to how a PPC works, try this quick exploration where students decide how they can split their time between two activities.:
1.3 Comparative Advantage and Gains from Trade
Absolute advantage, comparative advantage, and terms of trade. Emphasize that both parties are better off with trade and each party should specialize in the good/service that they have comparative advantage in. Review the concepts of exporting and importing.
Show how the Law of Demand shapes the Demand Curve. This is a great time to emphasize labeling, labeling, labeling! Introduce the determinants of demand and have students equate an increase in demand shifts the curve to the right; a decrease in demand shifts the curve to the left.
Show how the Law of Supply shapes the Supply curve. Use determinants of supply to decide what conditions cause the supply curve to increase or decrease.
1.6 Market Equilibrium, Disequilibrium, and Changes in Equilibrium
Put the demand and supply curves together and show how they create a point of equilibrium. Introduce price and quantity at equilibrium along with shortage and surplus. Use demand and supply determinants to change the equilibrium point and explain what happens to price and quantity.
AP Macro Unit 1 Review
AP Macro Unit 1 Review – Link to a Google Slides version included. From Google Slides you can download the file as a PowerPoint version too.