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AP Microeconomics Unit 1 Basic Economic Concepts questions with best answers
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AP Microeconomics Unit 1 Basic Economic Concepts Exam
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AP Microeconomics Unit 1 BasicEconomic Concepts
Production possibilities curve (PPC) - answersmodel that displays the trade-offs of a
simplified economy that produces only two goods
shows the maximum quantity of one good that can be produced given the quantity of
the other good produced if all resources are fully and efficiently utilized
Trade-off - answersalternatives that are given up whenever a course of action is taken
over others
Productive efficiency (efficient in production) - answerseconomy produces at a point that
is on its PPC
Allocative efficiency (efficient in allocation) - answerscondition in which resources are
used in a way that maximizes social satisfaction or social welfare and requires
normative economic analysis
Inefficient - answersmissing the opportunity to produce more of both goods
Opportunity cost - answersitem that must be given up to obtain some other item
Economics - answersstudy of human decision making and the role of scarcity in choice
Resources - answersanything used to produce something (good, service, or structure)
Land resources - answersnatural resources that are used to produce goods and
services
Labor - answerseffort a person devotes to a task for which that person is paid
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