Front
Scarcity
Back
The condition where unlimited wants exceed limited resources
Forces individuals and societies to make choices and trade-offs.
Public Deck
AP Macroeconomics - 50 Key Concepts
Master AP Macroeconomics with 50 flashcards covering GDP, fiscal policy, monetary policy, and international trade.
AnyFlashcards50 cards
Preview
Front
Opportunity Cost
Back
The value of the next best alternative foregone
Calculated as 'what you give up' divided by 'what you get'.
Front
Production Possibilities Curve (PPC)
Back
A graph showing the maximum combinations of two goods an economy can produce
Points inside the curve represent inefficiency; points on the curve represent efficiency.
Front
Comparative Advantage
Back
The ability to produce a good at a lower opportunity cost than another producer
Basis for mutually beneficial trade between nations.
Front
Absolute Advantage
Back
The ability to produce more of a good using the same amount of resources
Focuses on productivity rather than opportunity cost.
Front
Law of Demand
Back
Inverse relationship between price and quantity demanded
As price rises, quantity demanded falls, ceteris paribus.
Front
Law of Supply
Back
Direct relationship between price and quantity supplied
As price rises, quantity supplied rises, ceteris paribus.
Front
Market Equilibrium
Back
The point where quantity demanded equals quantity supplied
The price at which there is no shortage or surplus in the market.
Front
Gross Domestic Product (GDP)
Back
The total market value of all final goods and services produced within a country in a year
Formula: C + I + G + (X - M).
Front
Real vs. Nominal GDP
Back
Real GDP is adjusted for inflation; Nominal GDP uses current prices
Real GDP is the better measure of actual economic growth.
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