AP Macro Unit 1

We Supply itYou Demand it

100

The idea that as price goes up, quantity demanded will decrease

The Law of Demand

200

A movement ALONG the supply curve is a change in this.

Quantity Supplied

300

MERIT and TRICE are _____ of demand and supply respectively

Determinants

400

Name all 5 of the MERITs

Market Size, Expectations, Related Prices, Income, and Taste

500

Name all 5 TRICEs

Technology, Related Prices, Input Prices, Competition, Expectations

Opportunity of a Lifetime

100

What is given up as a result of making choices

Opportunity Cost

200

When one person can produce something with a lower opportunity cost

Comparative Advantage

300

If Nolan can make 12 gallons of ice cream of 3 jars of peanut butter, this is his opportunity cost for making 1 gallon of ice cream.

1/4 a jar of peanut butter

400

Draw a graph on the board that demonstrates increasing opportunity costs

Drawing

500

An important consideration is the opportunity cost of product goods. The opportunity cost is measured in this type of good which could change the available resources for the future.

Capital Goods

All Else Equilibrium

100

These are the two values that make up the ordered pair of the equilibrium

Quantity and Price

200

One of these need to change in order to change the equilibrium

Supply or Demand

300

If Supply shifts to the right, this is how price and quantity will change

Price decreases, quantity increases

400

If supply increases, and Demand increase, this will definitely increase

Quantity

500

If a nations income decreases while simultaneously Technology is improving, then quantity will...

Be indeterminate

Back to Basics

100

The fundamental problem of economics

Scarcity

200

Name the four categories of resources

Land, Labor, Capital, and Entrepreneurship

300

Opportunity cost demonstrates this concept of dealing with scarcity

Trade Off

400

This means that the amount of one good you give up is always the same for every additional unit of another good you make

Constant Opportunity Cost

500

What inequality must be true in order for their to be a shortage

Qs < Qd or Qd > Qs or P < Pe

I've Come toBargain

100

Comparative advantage is not to be confused with this situation, where I can flat out produce more of something

Absolute Advantage

200

Both parties will do better with this type of trade

mutually beneficial

300

If I have the comparative advantage in the production of a good, I will _______ and trade

Specialize

400

Without a change in available resources, mutually beneficial trade is the only way to achieve a point outside of this

PPC

500

I can make 20 cars or 100 apples, you can make 30 cars or 90 apples. Name a mutually beneficial term of trade

Between a ratio of 1:3 and 1:5 cars for apples