AP Micro Unit 1 Review: Basic Economic Concepts
AP Micro Unit 1 covers scarcity, opportunity cost, the production possibilities curve (PPC), comparative advantage and gains from trade, cost-benefit analysis, and marginal analysis with consumer choice. It is the foundation the other five units build on, and it is worth 12–15% of the exam.
What's in Unit 1
- 1Scarcity
- 2Resource allocation and economic systems
- 3Production possibilities curve (PPC)
- 4Comparative advantage and gains from trade
- 5Cost-benefit analysis
- 6Marginal analysis and consumer choice (utility maximization)
Study this unit free on EconLearn
Scarcity, opportunity cost, PPCs, and comparative advantage.
Full lesson, practice questions & flashcards →Utility, indifference curves, budget constraints, and optimal choice.
Full lesson, practice questions & flashcards →What to master for the exam
- Compute opportunity cost from a PPC or an output/input table and identify who has comparative advantage — this is a near-guaranteed exam question.
- Know that a country can hold an absolute advantage in both goods but never a comparative advantage in both.
- Apply the utility-maximizing rule: spend each dollar where marginal utility per dollar is highest, until MUx/Px = MUy/Py.
- Read PPC shapes: a bowed-out PPC means increasing opportunity cost; a straight line means constant opportunity cost.
AP Micro Unit 1: common questions
What is on AP Micro Unit 1?
Scarcity, resource allocation and economic systems, the production possibilities curve, comparative advantage and gains from trade, cost-benefit analysis, and marginal analysis including utility maximization. It accounts for roughly 12–15% of the AP Microeconomics exam.
What is the hardest part of AP Micro Unit 1?
Comparative advantage calculations. Students mix up output method (divide the other good by the good in question... larger output ÷ per unit) and input method. The reliable approach: always convert to opportunity cost per one unit, make a small table, and compare. Whoever gives up less has the comparative advantage.