Key Takeaways
Lesson Description
Key Takeaways
• Individuals and firms make decisions because resources are scarce.
• Every choice has an opportunity cost.
• Comparative advantage explains why specialization and trade increase efficiency.
• Production Possibilities Curves (PPCs) illustrate scarcity, efficiency, and economic growth.
• Rational decision-makers compare marginal benefits and marginal costs.
Must Know Models
Production Possibilities Curve (PPC)
Comparative Advantage Model
Must Know Vocabulary
Scarcity
Opportunity Cost
Trade-off
Marginal Analysis
Comparative Advantage
Absolute Advantage
Specialization
Factors of Production
AP Exam Focus
• Calculate opportunity cost.
• Identify comparative advantage.
• Interpret PPC graphs.