AP Micro Unit 1 - Basic Economics Concepts - Google Slides

UNIT 1: Basic Economics Concepts

MODULES

• Module 1.1: Scarcity and Choice

• Module 1.2: Economic Systems

• Module 1.3: The Production Possibilities Curve Model

• Module 1.4: Comparative Advantage and Trade

• Module 1.5: Cost-Benefit Analysis

• Module 1.6: Consumer Choice

SCARCITY AND CHOICE

Discussion Starter: What is Economics About?

• Economics is more than just money.

• Example: Breakfast choices—

  • Cooking breakfast

  • Skipping breakfast

  • Buying breakfast on the way to school

• Each choice involves weighing costs and benefits.

LEARNING OBJECTIVES

• Explain how scarcity and choice are central to economics.

• Define categories of resources.

• Understand the importance of opportunity cost in decision making.

• Distinguish between different types of economics.

SCARCITY AND CHOICE: THE CORE OF ECONOMICS

• Economics is fundamentally about scarcity and choice.

• Individuals face trade-offs:

  • A trade-off involves giving up one thing to gain another.

• Economic issues revolve around individual choices: decisions about actions taken or not taken.

BASIC PRINCIPLES OF INDIVIDUAL CHOICES

1. Resources are scarce.

2. Real cost: The actual cost of obtaining something is the value of what is given up to acquire it.

3. Marginal decisions: Addressing "How much?" decisions are made on the margin.

4. Optimizing behavior: People aim to maximize benefits within their constraints.