AP macroeconomics Practice Concepts with Complete Solutions.

Absolute advantage Correct Answer the ability to produce something more efficiently Capital Correct Answer productive equipment or machinery Comparative advantage Correct Answer the ability to produce something with a lower opportunity cost Economics Correct Answer a social science that studies how resources are used and is often concerned with how resources can be used to their fullest potential Efficiency Correct Answer using resources to their maximum potential Labor Correct Answer all human activity that is productive Land Correct Answer all natural resources Law of Increasing costs Correct Answer law that states that when more of a product is initially being produced, the higher the opportunity cost will be to produce still more Macroeconomics Correct Answer economic problems encountered by the nation as a whole Microeconomics Correct Answer economic problems faced by individual units within the overall company Opportunity cost Correct Answer the amount of one good that must be sacrificed to obtain an alternative good Positive economics Correct Answer economic analysis that draws conclusions based on logical deduction or induction (value judgements are avoided) Production possibilities frontier Correct Answer the combinations of two goods that can be produced if the economy uses all of its resources fully and efficiently Normative economies Correct Answer economies involving value judgement Resource Correct Answer anything that can be used to produce a good or service Allocative efficiency Correct Answer term for resources being deployed to produce just the right amount of each product to satisfy society's wants