Patricia's AP Macroeconomics Blog

UNIT 1: Intro to econ.

2. labor-

3.capitol-

human capitol is when people acquire skills and knowledge through experience and education
physical capitol- money, tools, buildings, machinery

4. entrepreneurship-

Vocab:

trade-off- alternative that we sacrifice when we make a decision
opportunity cost- next best alternative
guns or butter- refers to trade-offs that a country faces when choosing whether to produce more or less of military goods or consumer goods
thinking at the margin- deciding whether to add or subtract one additional unit of some resource
production possibilities graph/curve/frontier- shows alternative ways to use an economy's resources
efficiency- using resources in such a way to maximize the production of goods and services. increases profits
under-utilization- opposite of efficiency. using fewer resources than an economy is capable of using. leads to decreased profits

Basic concepts of economics:

macroeconomics- study of the economy as a whole. everything.
microeconomics- study of individual or specific units of the economy. supply and demand.
positive vs. normative economics- positive is claims that attempt to describe the world as it is; usually descriptive and fact based. Normative is claims that attempt to prescribe how the world should be; usually opinion based.
needs vs. wants- needs are basic requirements for survival. wants are desires.
scarcity vs shortage- scarcity is the fundamental economic problem that all societies face. how to satisfy unlimited wants with limited resources. shortage is when the quantity demanded exceeds the quantity supplied.
goods vs. services- goods are tangible commodities capitol goods are items used in the creation of other goods. consumer goods are intended for final use by the consumer. services are work that is done for someone (ex: doctor, teacher, etc)