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United StatesEconomics

Unit 1: Basic Economic Concepts

6 dot points across 6 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

Why do specialization and trade make both parties better off, even when one is more productive at everything?

Topic 1.3 Comparative Advantage and Gains from Trade: distinguish absolute from comparative advantage, calculate opportunity costs to determine comparative advantage, and identify the terms of trade that benefit both parties.
A focused answer to AP Macroeconomics Topic 1.3, covering absolute versus comparative advantage, calculating opportunity cost from output and input data, the basis for specialization, and the terms of trade, with full worked calculations.
12 min answer →

What determines how much of a good buyers are willing and able to purchase, and what makes the whole demand curve shift?

Topic 1.4 Demand: explain the law of demand, distinguish a change in quantity demanded from a change in demand, and identify the determinants that shift the demand curve.
A focused answer to AP Macroeconomics Topic 1.4, covering the law of demand, the demand curve, movements along versus shifts of demand, the determinants of demand, and normal versus inferior goods, with worked exam-style questions.
11 min answer →

How do supply and demand together determine the market price and quantity, and how does equilibrium change when a curve shifts?

Topic 1.6 Market Equilibrium, Disequilibrium, and Changes in Equilibrium: determine equilibrium price and quantity, analyze surpluses and shortages, and predict the new equilibrium when supply or demand shifts.
A focused answer to AP Macroeconomics Topic 1.6, covering market equilibrium, surpluses and shortages, the adjustment process, and how single and double shifts in supply and demand change equilibrium price and quantity, with full worked analysis.
12 min answer →

How does the production possibilities curve model scarcity, opportunity cost, efficiency, and economic growth?

Topic 1.2 Opportunity Cost and the Production Possibilities Curve: use the PPC to illustrate scarcity, trade-offs, opportunity cost, efficiency, and growth, and explain constant versus increasing opportunity cost.
A focused answer to AP Macroeconomics Topic 1.2, covering opportunity cost, the production possibilities curve, efficient and inefficient points, the law of increasing opportunity cost, and how growth shifts the PPC, with full worked calculations.
12 min answer →

Why must every society make choices, and how do scarcity, the factors of production, and economic systems frame those choices?

Topic 1.1 Scarcity: explain how scarcity forces individuals and societies to make choices, distinguish needs from wants, identify the factors of production, and describe how different economic systems answer the three basic economic questions.
A focused answer to AP Macroeconomics Topic 1.1, covering scarcity, the economic problem, the factors of production, the three basic economic questions, and how command, market and mixed economies answer them, with worked exam-style questions.
11 min answer →

What determines how much of a good producers are willing to sell, and what makes the whole supply curve shift?

Topic 1.5 Supply: explain the law of supply, distinguish a change in quantity supplied from a change in supply, and identify the determinants that shift the supply curve.
A focused answer to AP Macroeconomics Topic 1.5, covering the law of supply, the supply curve, movements along versus shifts of supply, the determinants of supply, and the role of production costs, with worked exam-style questions.
11 min answer →