AP Micro Unit 1

the study of the economic behavior and decision making of small units, such as individuals, families, and businesses

• Macroeconomics

• Microeconomics

• Economics

• Cost-Benefit Analysis

The study of how people seek to satisfy their needs and wants by making choices

• Cost Benefit Analysis

• Economics

• Macroeconomics

• Microeconomics

the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth

• Microeconomics

• Macroeconomics

• Economics

• Cost Benefit Analysis

A situation in which unlimited wants exceed the limited resources available to fulfill those wants

• Poor

• 3rd World

• Scarcity

• Shortage

alternative that must be given up when one choice is made rather than another

• trade-offs

• give-ups

• options

• discard

Cost of the next best alternative use of money, time, or resources when one choice is made rather than another

• Opportunity Costs

• Trades

• Options

• Marginal

land, labor, capital, entrepreneurship

• Factors of Production

• Money

• Outputs

• Goods

all natural resources used to produce goods and services

• Entrepreneurship

• Land

• Labor

• Capital

Human effort directed toward producing goods and services

• Land

• Labor

• Capital

• Entrepreneurship

It is the tools and equipment used to produce goods and services

• Land

• Labor

• Capital

• Entrepreneurship