The AP Microeconomics and
Macroeconomics Tests
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2/3 Multiple Choice
1/3 Free Response
Micro in a Nutshell!
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Basic Microeconomic Concepts (8-14%):
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Scarcity, choice, and opportunity cost
Production possibilities curve
Comparative advantage, specialization, and
exchange
Economics!
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“The study of how human beings
coordinate their wants and desire, given
the decision-making mechanisms, social
customs, and political realities of the
society”
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What, and how much, to produce
How to produce it
For whom to produce it
Everything Has a Cost
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“No such thing as a free lunch”
Opportunity cost- what must be sacrificed
to obtain something
People choose for good reasons
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Normative Economics- Value Judgments
(opinions); how things ought to be
Positive Economics- Scientific Method
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Ex. Is it better for society to spend money
providing more federal financial college aid or
to save the whales????????
Incentives matter!
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People create economic systems to
influence choices and incentives (ex.
“Cash for Clunkers”)
People Gain From Voluntary Trade
Economic Thinking is Marginal
Thinking
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Marginal choices involve the effects of
additions and subtractions from current
conditions.
The Value of a Good or Service is
Affected by People’s Choices
Economic Actions Create Secondary
Effects
College Board wants you to be able
to answer:
1.Scarcity is correctly described by which of
the following statements?
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I. Scarcity exists if there are more uses for
resources than can be satisfied at one time.
II. Scarcity exists if decisions must be made about
alternative uses for resources.
III. Scarcity would not exist in a society in which
people wanted to help others instead of
themselves.
A.I only B.II only C.III only D.I and II only
E.I, II, and III