AP-Microeconomics-Visuals-Unit1

AP-Microeconomics-Visuals-Unit1 - • People gain from...

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Unit 1 : Microeconomics Visual 1.4 National Council on Economic Education http://apeconomics.ncee.net Absolute Advantage and Comparative Advantage ABSOLUTE ADVANTAGE One nation can produce more output with the same resources as the other. COMPARATIVE ADVANTAGE One nation can produce a good at a lower opportunity cost than the other. EXAMPLES OF COMPARATIVE ADVANTAGE Lawyer and secretary Doctor and nurse
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Unit 1 : Microeconomics Visual 1.3 National Council on Economic Education http://apeconomics.ncee.net The Circular Flow of Resources, Goods, Services and Money Payments
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Unit 1 : Microeconomics Visual 1.2 National Council on Economic Education http://apeconomics.ncee.net Possibilities Curve Production
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Unit 1 : Microeconomics Visual 1.1 National Council on Economic Education http://apeconomics.ncee.net The Economic Way of Thinking Everything has a cost. People choose for good reasons. Incentives matter. People create economic systems to influence choices and incentives.
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Unformatted text preview: • People gain from voluntary trade. • Economic thinking is marginal thinking. • The value of a good or service is affected by • people’s choices. • Economic actions create secondary effects. • The test of a theory is its ability to predict • correctly. Unit 1 : Microeconomics Visual 1.5 National Council on Economic Education http://apeconomics.ncee.net Determining Comparative Advantage (Output Method) 1. Which nation has an absolute advantage in producing CDs? 2. Which nation has an absolute advantage in producing beef? 3. Which nation has a comparative advantage in producing CDs? 4. Which nation has a comparative advantage in producing beef? 5. Should Japan specialize in CDs or beef? 6. Should Canada specialize in CDs or beef? Unit 1 : Microeconomics Visual 2.1 National Council on Economic Education http://apeconomics.ncee.net Changes in Demand and Quantity Demanded...
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This note was uploaded on 04/25/2010 for the course EDU 234234 taught by Professor Smith during the Spring '10 term at Oregon Tech.

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AP-Microeconomics-Visuals-Unit1 - • People gain from...

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