AP Microeconomics AMSCO Guided Notes
1.1: Scarcity
AP Microeconomics Guided Notes
AMSCO 1.1 - Scarcity
Essential Questions
- How do individuals and economies confront the problem of scarce resources?
A. Economics: The Study of Scarcity and Choice
1. What is scarcity and how does it relate to the choices people make?
2. What is a trade-off and how does it apply to economic decision-making?
1. Economic Trade-Offs and Constraints
1. What is a constraint and how does it force people to make trade-offs?
2. What is opportunity cost and why is it important in economic decision-making?
2. Who Are Economists?
1. What are three main ways that economists contribute to understanding economic behavior?
2. Why do economists' predictions sometimes fail to come true?
B. What Are the Branches of Economics?
1. Microeconomics
1. What is microeconomics and what types of economic decisions does it examine?
2. Macroeconomics
1. How does macroeconomics differ from microeconomics in its focus?
C. Goods, Services, and Other Terms Economists Use
1. Goods and Services
1. What is the difference between goods and services?
2. Consumers and Consumption
1. What is a consumer and how does scarcity affect consumer decision-making?
2. How do trade-offs apply to both individual consumers and entire societies?
D. Economic Resources: Factors of Production
1. What are the factors of production and why are they essential to creating goods and services?
1. Land
1. What does the term 'land' include in economics and why is it considered a limited resource?
2. Labor
1. What is labor and how do both the number of workers and their productivity affect production?
2. What factors determine worker productivity and how can it be increased?
3. Capital
1. What is capital and what happens when capital is not maintained or replaced?
2. What is human capital and how does it contribute to productivity?
4. Entrepreneurship
1. What is entrepreneurship and what role do entrepreneurs play in the economy?
2. What are the risks and potential rewards of entrepreneurship?
E. Rival and Non-Rival Factors of Production
1. What is the difference between rival and non-rival goods and services?
1. Non-Rival Factors of Production
1. Why is data considered a non-rival resource and how do companies use it?
2. What concerns have arisen from companies' collection and use of consumer data?
2. Non-Rival Does Not Mean Freely Available
1. Why do companies treat non-rival data as scarce even though it is not depleted by use?
3. Established Knowledge
1. What is established knowledge and what are examples of sources that provide it?
2. How does the availability of established knowledge affect economic productivity and innovation?
F. The Big Questions of Economics
1. What are the three fundamental economic questions that every society must answer?
Key Terms
trade-off
economics
scarcity
constraint
opportunity cost
microeconomics
macroeconomics
goods
services
consumer
consumption
economic resources
factors of production
land
labor
capital
human capital
entrepreneurship
rival nature
non-rival nature