AP Macroeconomics and Microeconomics Mr. Sadow Chapters 1-2 Homework

Use the Chapters 1-2 presentation on our website, which is the same we use in class.

Pages 1-18 due by

1. Define economics.

2. Define scarcity. Give an example.

3. Define market.

4. Define opportunity cost. Give an example.

5. Create a real life economic interaction involving the concepts of scarcity, choice, and opportunity cost.

6. Define gains from trade.

7. Define specialization.

8. Define division of labor.

9. Define production possibilities.

10. Define increasing opportunity costs. Create a table and show an example.

11. Define production possibilities curve/frontier (PPC/PPF).

12. What are the three reasons (shifters) that move the production possibilities curve/frontier in or out?

13. Explain why points on the production possibilities curve/frontier are efficient or production efficient.

14. Define social or allocative efficiency.

Pages 19-50 due by

1. Explain why points within the production possibilities curve/frontier are inefficient.

2. Why would a point outside of the curve/frontier be impossible? What else does a point outside indicate?

3. Draw a graph of a production possibilities curve/frontier showing increasing/not proportional opportunity costs. Include at least three

efficient points, one inefficient, and one impossible. Clearly label everything, including each point and if each point is efficient,

inefficient, or impossible.

4. Draw a graph of a production possibilities curve/frontier showing constant opportunity costs. Include at least three efficient points,

one inefficient, and one impossible. Clearly label everything, including each point and if each point is efficient, inefficient, or

impossible.

5. Explain why production possibilities curves/frontiers can shift. Draw two graphs of shifting curves, one indicating increasing/not

proportional opportunity costs and one indicating constant opportunity costs. Show low growth on one and high growth on another.

Clearly label everything, including each point and curve.

6. Define absolute advantage.

7. Define comparative advantage.

8. What is the formula for calculating opportunity costs?

9. Draw a table and, using any two products, two countries, and numbers you want, create a situation where both countries have an

absolute advantage in only one product. Also list which country has a comparative advantage in each product. Show your

calculations.

10. Draw a graph and, using any two products, two countries, and numbers you want, create a situation where only one country has an

absolute advantage in both products. Also list which country has a comparative advantage in each product. Show your

calculations and label everything.

11. Using our website, use the “Chapters 1-2 vocabulary Quizlet” link to review the words we have studied so far this chapter.

Pages 69-79 due by

1. Explain the major three questions every economy must answer.

2. Compare and contrast the following: market economy, command economy, and mixed economy.

3. Define freely determined prices (P). Why is it important in a market economy?

4. Define property rights. Why is it important in a market economy?

5. Define incentives. Why is it important to have property rights?

6. What is the role of government in a market economy?

7. Compare and contrast market failure and government failure.

8. In an economy that has a price system, what is the role of prices (P)?

9. Define gross domestic product (GDP).

10. Define relative.

11. Define economic variable. Give an example.

12. Using our website, use the “Chapters 1-2 vocabulary Quizlet” link to review the words we have studied so far this chapter.

Pages 79-84 due by

1. Define positive correlation. Give an example.

Look on the back to complete this homework

2. Define negative correlation. Give an example.

3. Define causation. Give an example.

4. Define ceteris paribus. Give an example.

5. Define microeconomics and explain its focus.

6. Define macroeconomics and explain its focus.

7. Who is the father of economics?

8. Define laissez faire. Explain its significance.

9. Define positive economics.

10. Define normative economics.

11. Using our website, use the “Chapters 1-2 vocabulary Quizlet” link to review the words we have studied so far this chapter.

13. Using our website, use the “Chapters 1-2 Microeconomics- essential graphs and formulas Quizlet” link to review the most

important graphs and formulas that appear in the free-response questions.