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Unit 1 · Basic Economic Concepts Unit Hub Flashcards Cheat Sheet Essentials Visual Review MC Practice FRQ Practice
Unit 1 · 5–10% of Exam

Basic Economic Concepts

The foundation of every other unit. Scarcity and opportunity cost, the production possibilities curve, comparative advantage and trade, and the basics of supply, demand, and market equilibrium. Master this and the rest of AP Macro gets a lot easier.

6 topics
~7–9 class periods
3 key ideas
College Board aligned
← Back to AP Macroeconomics

Choose your study tool

Six ways to master Unit 1 — pick whichever fits how you like to study.

Flashcards
25 interactive flashcards covering every key term from Unit 1. Tap to flip, shuffle, and use keyboard arrows.
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Cheat Sheet
A one-page visual summary of Unit 1 — every key topic, term, and theme on a single screen.
Open cheat sheet →
Essentials
The big ideas plus a searchable glossary of every vocabulary term you need to know for the exam.
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Visual Review
A slide-by-slide walkthrough of Unit 1 with diagrams of the PPC, comparative advantage, and supply and demand.
Open visual review →
MCQ Practice
30 multiple-choice questions in College Board exam style — with full explanations of every answer.
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FRQ Practice
A free-response question with model answers showing exactly how each part earns its point on the exam.
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Topics in Unit 1

Six topics from the College Board CED, in order.

Topic 1.1
Scarcity
Why unlimited wants and limited resources force every individual, firm, and society to make choices.
Topic 1.2
Opportunity Cost & the Production Possibilities Curve
Opportunity cost, efficiency, and growth illustrated through the PPC model.
Topic 1.3
Comparative Advantage & Gains from Trade
Absolute vs. comparative advantage, and why specialization and trade benefit both parties.
Topic 1.4
Demand
The law of demand, determinants of demand, and shifts vs. movements along the demand curve.
Topic 1.5
Supply
The law of supply, determinants of supply, and shifts vs. movements along the supply curve.
Topic 1.6
Market Equilibrium, Disequilibrium & Changes in Equilibrium
Finding equilibrium price and quantity, shortages and surpluses, and how shifts in supply or demand change equilibrium.

About Unit 1

Unit 1 is the conceptual foundation for the rest of AP Macroeconomics. You'll learn why scarcity forces every choice to have a cost — and how the production possibilities curve turns that idea into a model economists use constantly. You'll also meet the engine of every market: supply and demand, the tool that explains how prices and quantities are determined and how they change.

This unit is roughly 5–10% of the AP Macro exam and takes about 7–9 class periods. It's the smallest unit by exam weight, but every later unit assumes you can read a supply-and-demand graph and explain opportunity cost without hesitation. If you can't explain why a shift in demand is different from a movement along the demand curve here, Units 3 and 4 (the big models) will be much harder.

Three ideas anchor Unit 1 and recur across the whole course — including two of the College Board's Big Ideas, Markets (MKT) and Macroeconomic Models (MOD):

Key Idea 1
Scarcity — every choice has a cost
Key Idea 2
Markets — prices coordinate decisions
Key Idea 3
Models — economists simplify reality to explain it
Up next
Unit 2: Economic Indicators & the Business Cycle
Start Unit 2 →