In this unit, you'll learn fundamental economic concepts like scarcity, opportunity cost, and supply and demand. Since we are faced with scarcity, we must make choices about how to allocate and use scarce resources. Unit I: Basic Economic Concepts. In economics, consumers make rational choices by weighing the costs and benefits. For example, countries can specialize in what they are good at producing and then trade for goods and services that they are not as efficient at. As consumers, we want to maximize our satisfaction, which is known as utility maximization. Opportunity cost and the Production Possibilities Curve, Market equilibrium, disequilibrium, and changes in equilibrium. The resources that are scarce in every society are divided into four categories: Trade-offs—each of the alternative choices that you gave up when making a decision. If they were producing at Combo B and moved to Combo A, their opportunity cost would be 8 million cars. Lesson summary: Introduction to Macroeconomics, Introduction to scarcity and the economic way of thinking, PPCs for increasing, decreasing and constant opportunity cost, Production Possibilities Curve as a model of a country's economy, Lesson summary: Opportunity cost and the PPC, Comparative advantage, specialization, and gains from trade, Comparative advantage and absolute advantage, Opportunity cost and comparative advantage using an output table, Input approach to determining comparative advantage, Lesson summary: Comparative advantage and gains from trade, Comparative advantage and the gains from trade, Level up on the above skills and collect up to 300 Mastery points, Change in expected future prices and demand, Changes in income, population, or preferences, Change in demand versus change in quantity demanded, Lesson summary: Demand and the determinants of demand, Change in supply versus change in quantity supplied, Lesson summary: Supply and its determinants, Changes in equilibrium price and quantity when supply and demand change, Lesson summary: Market equilibrium, disequilibrium, and changes in equilibrium, Level up on the above skills and collect up to 400 Mastery points. Microeconomics is the study of how individuals, households, and firms make decisions and allocate resources. Soon the Fiveable Community will be on a totally new platform where you can share, save, and organize your learning links and lead study groups among other students!, 2550 north lake drivesuite 2milwaukee, wi 53211. Micro Unit 1 & 2: Basic Economic Concepts, Supply & Demand, Elasticity, Taxes & Tariffs, & Consumer Choice Theory There are many similarities in the fist two units of macroeconomics and microeconomics – notably the topics of comparative advantage , the production possibilities curve , and supply and demand will show up in unit 1 and 2. You will learn things like the distinction between absolute and comparative advantage, how to identify comparative advantage from differences in opportunity costs, and how to apply the principle of comparative advantage to determine the basis on which mutually advantageous trade can take place between individuals and/or countries. play trivia, follow your subjects, join free livestreams, and store your typing speed results. As a result of facing scarcity, all members of a society have to make choices in an effort to manage our resources in the most efficient way possible. Exclusive unit summary videos, practice questions, study guides, and practice sheets with answer keys . 1.2: Resource Allocation and Economic Systems, 1.3: Production Possibilities Curve (PPC), Introduction to the Production Possibilities Curve (PPC), Constant Opportunity Cost vs. Increasing Opportunity Cost, Shifters of the Production Possibilities Curve (PPC), 1.6: Marginal Analysis and Consumer Choice, Centrally-Planned (Command) Economic System, Opportunity Costs/Per Unit Opportunity Cost, 2.6: Market Equilibrium and Consumer and Producer Surplus, 2.7: Market Disequilibrium and Changes in Equilibrium, 2.8: The Effects of Government Intervention in Markets, 2.9: International Trade and Public Policy, Long-Run Decisions to Enter or Exit the Market, Side by Side Graphs in Perfect Competition, Different Types of Short Run Perfectly Competitive Graphs, Shift from Short-Run to Long-Run Equilibrium in a Perfectly Competitive Market, Shift from Long-Run to Short-Run back to Long-Run, Characteristics of Imperfectly Competitive Firms, Characteristics of Monopolistic Competition, Characteristics Compared to Other Market Structures, Sample Free Response Question (FRQ): 2007 Question #3, 5.2: Changes in Factor Demand and Factor Supply, 5.3: Profit-Maximizing Behavior in Perfectly Competitive Factor Markets, Unit 6: Market Failure and the Role of Government, 6.1: Socially Efficient and Inefficient Market Outcomes, 6.4: The Effects of Government Intervention in Different Market Structures.

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