Unit 1

  • AP Economics - Unit 1

    Introduction to Economics

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    Summary

    A macroeconomics course introduces students to fundamental economic concepts such as scarcity and opportunity costs. Students understand the distinction between absolute and comparative advantage, and apply the principle of comparative advantage to determine the basis on which mutually advantageous trade can take place between individuals and/or countries, and to identify comparative advantage from differences in opportunity costs. Other basic concepts that are explored include the functions performed by an economic system, and the way the tools of supply and demand are used to analyze the workings of a free market economy. The course should also introduce the concept of the business cycle to give students an overview of economic fluctuations and to highlight the dynamics of unemployment, inflation, and economic growth. Coverage of these concepts provides students with the foundation for a thorough understanding of macroeconomic concepts and issues.