AP Macroeconomics Exam Study Guide.
Economics - answerThe social science that studies how individuals, institutions, and society
make the optimal best choices under conditions of scarcity
Microeconomics - answerSpecific units in the economy (ex: how prices and output are
determined for products...
Competition - answer✔The struggle among producers for the dollars of consumers
Market - answer✔Any arrangement that allows buyers and sellers to exchange things
Division of Labor/Specialization - answer✔When workers devote themselves to doing what
they're best at, increasing the efficiency of the firm and of the economy
Money - answer✔Anything that serves as a medium of exchange, a unit of account, and a store
of value
"Invisible Hand" - answer✔The term economists use to describe the self-regulating nature of the
marketplace
Households - answer✔One or more persons occupying a housing unit
Businesses - answer✔Economic entities (firms) that purchase resources and provide goods and
services to the economy.
Sole Proprietorship - answer✔Business owned and operated by a single person
Corporation - answer✔A business owned by stockholders who share in its profits but are not
personally responsible for its debts
Product Market - answer✔The market in which households purchase the goods and services that
firms produce
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