What is scarcity?
Factors of production
Capital: the most common AP mistake
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How scarcity creates trade-offs
The PPC shows all efficient output combinations given scarce resources
Reading the PPC
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Opportunity cost on the PPC
Worked example
Moving from X to Y: gaining 45 consumer goods costs 38 capital goods
Why the PPC bows outward
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Marginal analysis
The optimal quantity is where the MB and MC curves intersect
Reading the MB/MC graph
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Applying marginal analysis
The three fundamental questions
Economic systems
How the price mechanism works
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Scarcity vs. shortage
Free goods vs. economic goods
AP exam tips for 1.1
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Common mistakes
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