ap macro unit 1

The producer that can produce the most output OR requires the least amount of inputs (resources)

to distribute

resources that are invested with the expectation of future gain

goods that are used in producing other goods

all other things held constant

the producer with the lowest opportunity cost

Resources are easily adaptable for producing either good

created for direct consumption

a consumer's desire and willingness to pay a price for a specific good or service

the study of how society manages scarce resources

the sensitivity of the quantity demanded to a change in price

ambitious leaders that combine the other factors of production to create goods and services

states that changes in price affect the purchasing power of a consumer's income

the opportunity cost of producing additional units of a good rises as society produces more of that good

to spend money to improve business production

any effort a person devotes to a task for which that person is paid

natural resources used to produce

the satisfaction a person gets from using a product will diminish with each additional unit consumed

additional

making decisions based on weighing the marginal benefits and costs of that action

opportunity cost/units gained

model that shows alternative ways that an economy can use its scare resources

measure of efficiency that shows output

the imbalance between limited productive resources and unlimited human wants

1. Tastes and Preferences

2. Number of Consumers

3. Price of Related Goods

4. Income

5. Future Expectations

1. Prices/availability of inputs (resources)

2. Number of producers

3. Technology

4. Government action (taxes & subsidies)

5. Expectations of future profit

1. change in resource quantity or quality

2. change in technology

3. change in trade

changes in price motivate people to buy relatively cheaper substitute goods

the different quantities of a good that sellers are willing and able to sell (produce) at different prices

satisfaction