AP Microeconomics Unit 1 Basic
Economic Concepts
Economics - answersThe study of choices
Scarcity - answersA situation in which unlimited wants exceed the limited resources
available to fulfill those wants
Microeconomics - answersthe study of how households and firms make decisions and
how they interact in markets
Macroeconomics - answersthe study of the economy as a whole, including topics such
as inflation, unemployment, and economic growth
Positive Statements - answersclaims that attempt to describe the world as it is (without
judgement)
Normative Statements - answersclaims that attempt to prescribe how the world should
be
Utility - answersthe capacity to be useful and provide satisfaction
Marginal - answersOne additional unit of something
Allocate - answersto distribute
Factors of Production - answersland, labor, capital, entrepreneurship
Land - answersall natural resources used to produce goods and services
labor - answersHuman effort directed toward producing goods and services
Economic Concepts
Economics - answersThe study of choices
Scarcity - answersA situation in which unlimited wants exceed the limited resources
available to fulfill those wants
Microeconomics - answersthe study of how households and firms make decisions and
how they interact in markets
Macroeconomics - answersthe study of the economy as a whole, including topics such
as inflation, unemployment, and economic growth
Positive Statements - answersclaims that attempt to describe the world as it is (without
judgement)
Normative Statements - answersclaims that attempt to prescribe how the world should
be
Utility - answersthe capacity to be useful and provide satisfaction
Marginal - answersOne additional unit of something
Allocate - answersto distribute
Factors of Production - answersland, labor, capital, entrepreneurship
Land - answersall natural resources used to produce goods and services
labor - answersHuman effort directed toward producing goods and services
