Summary
Summary AP Microeconomics exam 2024 rated A
- Course
- Institution
AP Microeconomics exam 2024 rated A
[Show more]
Content preview
AP Microeconomics exam 2024 rated AEconomics - The study of how people, firms, and societies use their scarce
productive resources to best satisfy their unlimited material wants.
Resources - Factors of production, 4 categories: labor, physical capital,
land/natural resources, and entrepreneurial ability
Scarcity - The imbalance between limited productive resources and unlimited
human wants
Opportunity Cost - The most desirable alternative given up as the result of a
decision
Marginal Benefit (MB) - The additional benefit received from the consumption of
the next unit of a good or service
Marginal Cost (MC) - The additional cost incurred from the consumption of the
next unit of a good or a service
Marginal Analysis - The rational decision maker chooses an action if MB ≥ MC
,AP Microeconomics exam 2024 rated A
Law of Increasing Costs - The more of a good that is produced, the greater the
opportunity cost of producing the next unit of that good
Absolute Advantage - Exists if a producer can produce more of a good than all
other producers
Comparative Advantage - Exists if a producer can produce a good at lower
opportunity cost than all other producers
Specialization - When firms focus their resources on production of goods for
which they have comparative advantage
Productive Efficiency - Production of maximum output for a given level of
technology and resources. All points on the PPF are productively efficient
Allocative Efficiency - Production of the combination of goods and services that
provides the most net benefit to society. The optimal quantity of a good is
achieved when the MB = MC of the next unit and only occurs at one point on the
PPF
, AP Microeconomics exam 2024 rated A
Economic Growth - Occurs when an economy's production possibilities increase.
This can be a result of more resources, better resources, or improvements in
technology.
Market Economy (Capitalism) - An economic system based upon the fundamentals
of private property, freedom, self-interest, and prices
Law of Demand - Holding all else equal, when the price of a good rises, consumers
decrease their quantity demanded for that good
Absolute prices - The price of a good measured in units of currency
Relative Prices - The number of units of any other good Y that must be sacrificed
to acquire good X. Only relative prices matter
Substitution Effect - The change in quantity demanded resulting from a change in
the price of one good relative to other goods
Income Effect - The change in quantity demanded that results from a change in
the consumer's purchasing power (or real income)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Ellah1. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
71184 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now