AP MICRO REVIEW

AP Economics Mr. Crawford Basics of Economics Review Guide
UNIT ONE FUNDAMENTALS OF ECONOMICS
CHOICE EUSR=MSUW OPPORTUNITY COST TINSTAAFL SCARCITY LIMITED AND DESIRABLE RATIONAL THINKING COST-BENEFIT ANALYSIS FUTURE UTILITY INVESTMENT MARGINAL THINKING IMPERFECT INFORMATION ECONOMIC THEORY POSITIVE/OBJECTIVE FACTS THEORY INDUCTION DEDUCTION NORMATIVE/SUBJECTIVE POLICY FALLACIES POST HOC COMPOSITION DEFINITION BIAS
THE FOUR FUNDAMENTAL QUESTIONS TRADITIONAL SYSTEMS BARTER ADAM SMITH GREED PROFIT MOTIVE PRIVATE PROPERTY FREEDOM OF CHOICE MARKETS COMPETITION NO GOVT "LAISSEZ FAIRE" "INVISIBLE HAND" CAPITALISM SPECIALIZATION CAPITAL MONEY CONSUMER SOVEREIGNTY DERIVED DEMAND
UNIT TWO SUPPLY AND DEMAND
DEMAND Law of Demand CHANGE IN P= CHANGE IN Qd INVERSE DMU YFX SFX CHANGE IN NPD= CHANGE IN D TASTES INCOME MORE OR FEWER BUYERS EXPECTATIONS RELATED GOODS' PRICES SUB=SAME COMP=OPPOSITE CHANGE IN D= PQ CHANGE IN D= PQ		SUPPLY Law of Supply CHANGE IN P = CHANGE IN Qs DIRECT DMR/IC P X Q = TR CHANGE IN NPD= CHANGE IN S GOVERNMENT TAXES/SUBSIDIES PRICE CONTROLS OTHER PROFIT OPPORTUNITIES NUMBER INVESTMENT IN TECHNOLOGY COST OF RESOURCE EXPECTATIONS CHANGE IN S= PQ CHANGE IN S= PQ
UNIT THREE MARKET FAILURE
KARL MARX WEALTH = UTILITY LABOR THEORY OF VALUE ALIENATION EXPLOITATION SUBSISTENCE PROFIT IS SURPLUS LABOR FLAWS OF CAPITALISM EXTERNALITIES PUBLIC COSTS ASYMMETRIC INFORMATION PUBLIC GOODS IMPERFECT COMPETITION MONOPOLY INEQUITY SOLUTION UNIONS REVOLUTION GOVERNMENT PUBLIC OWNERSHIP SOCIALISM
SURPLUS CONSUMER SURPLUS DIFFERENCE BETWEEN WHAT CONSUMERS ARE WILLING TO PAY AND WHAT THEY HAVE TO PAY IN ORDER TO RECEIVE THE PRODUCT UTILITY PRODUCER SURPLUS AMOUNT GREATER THAN COST WHICH PRODUCERS RECEIVE FOR PRODUCT PROFIT