This lesson covers Topics 1.1-1.3 in the AP Syllabus. Today we will learn about the concept of scarcity, the idea that societies and people have a limited ability to produce the things we want but an unlimited desire to consume those things. I will introduce the production possibilities model as our theoretical framework for this. You should have read the text chapter identified below in the homework section and watched the related videos. This page contains all the information you need for today's class. Use the table of contents on the right to help you navigate.
Learning Target: Analyze how incentives influence choices that may result in policies with a range of costs and benefits for different groups.
Criteria for Success
I will be able to use ideas related to economic systems and the production possibilities model to analyze economic problems.
I will be able to demonstrate this understanding using a graph of the aforementioned model.
Assignments
Read: Krugman (Modules 1 and 3)
Watch: The video lecture for today's topic (embedded above)
Optional: The videos linked below
Khan Academy
Formative Assessment (MCQ's): You will take a formal assessment during class. The assessment will consist of multiple-choice questions and one FRQ from an old AP Exam. Doing the problem of the day and ensuring that you understand it will help you prepare for today's formative assessment and help to ensure that you understand the concepts in this lesson.
Problem of the Day: Imagine a society that produces capital goods and consumer goods.
Draw a production possibilities frontier for capital goods and consumer goods. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape.
Show a point that is impossible for the economy to achieve. Show a point that is possible to achieve but inefficient.
Identify a point that is productively effiicient and explain why it is productively efficient.
Define allocative efficiency. Identify a point that might be allocatively efficient and explain what must be true for this to be an allocatively efficient outcome.
Identify a point on the production possibilities curve that would be representative of a country that allocates more resources to capital goods than consumer goods. On the diagram illustrate the economic growth that will result from this choice and explain why a country that uses its resources for consumer goods instead of capital goods would experience less growth.