Download AP Economics

AP Economics
Hamilton-Wenham Regional High School
Robert Emmett
2011-2012
AP Economics is a new course at our school replacing an introductory principles course. The
AP Economics course will consist of two sections with enrollment in the high-20s to the low30s for both classes. There are two 50 minute and one 70 minute class each week plus an
additional 70 minute class every other week. All told, there are over 3 ½ hours of class time
per week and there are roughly 39 weeks between the beginning of the school year and the
AP examination. The first semester is will cover the introduction, microeconomics and the
beginning of macroeconomics. The second semester will cover the remainder of
macroeconomics as well as test preparation.
Course Materials
Anderson, David. Economics by Example. Worth Publishers (2007).
* McConnell, Brue & Flynn. Economics: Principles, Problems & Policies.
McGraw-Hill Irwin, 19th Edition (2012).
McConnell, Brue, Flynn & Walstad. Study Guide for Economics 19th Edition.
McGraw-Hill Irwin, 19th Edition (2012).
Morton, John & Goodman, Rae Jean. Advanced Placement Economics.
National Council on Economic Education, 3rd Edition (2003)
Watts, McCorkle, Meszaros & Schug. Focus: High School Economics.
National Council on Economic Education, (2001)
Wheelan, Charles. Naked Economics: Undressing the Dismal Science. W. W.
Norton (2010).
* Course textbook.
Microeconomics
Course Overview
AP Economics is a yearlong course divided into two major components: Microeconomics
and Macroeconomics. The first section, Microeconomics, is the primary focus of the first
semester. The main areas of concentration include basic economic concepts; the nature and
functions of product markets; factor markets; and, efficiency, equity, and the role of
government. Students are expected not only to know the material but also to apply critical
thinking skills to the units covered.
Unit I: Basic Economic Concepts
Allocated time:
3.5 Weeks
Dates:
8/29 – 9/23
Percentage of Exam
8 – 12% (Micro)
Readings, Concepts & Assignments:
Naked Economics – Entire book (summer reading)
McConnell, Brue
Chapter 1, Limits, Alternatives, & Choices
Scarcity
Choice
Positive Economics
Normative Economics
Opportunity Costs
Production Possibilities Curve
Chapter 2, The Market System & Circular Flow
Market System
Command System
Competition
Five Fundamental Questions
Invisible Hand
Circular Flow Model
Chapter 6, Consumer Behavior
Consumer Behavior
Demand Schedule
Demand Curve
Income Effect
Substitution Effect
Chapter 15, Natural Resource and Energy Economics
Renewable Resources
Nonrenewable Resources
Chapter 25, Economic Growth
Determinants of growth
High School Economics LP
Economics by Example, Ch 2
Reading and discussion from
The Accidental Theorist, Paul Krugman
Excerpts from Freakonomics
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit II: Nature and Function of Product Markets; Allocated
time:
5 Weeks
Dates:
9/26 – 10/27
Percentage of Exam
55 – 70% (Micro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 3, Demand, Supply, and Market Efficiency
Law of Demand
Demand Curve
Changes in Quantity Demanded
Determinants of demand
Law of Supply
Supply curve
Determinants of supply
Changes in quantity supplied Market Equilibrium
Efficient allocation
Price Ceilings & floors
Chapter 4, Elasticity
Price elasticity of demand
Total revenue test
Determinants of price elasticity
Price elasticity of supply
Short run & long run
Cross elasticity of demand
Income elasticity
Chapter 5, Market Failures: Public Goods & Externalities
Demand side market failures Supply side market failures
Consumer surplus
Producer surplus
Government intervention
Chapter 6, Consumer Behavior
Law of diminishing marginal utility
Demand curve
Income effect
Substitution effect
Chapter 7, Business & the Costs of Production
Explicit costs
Implicit costs
Economic profit
Law of diminishing returns
Fixed, variable & total costs Average costs
Marginal costs
Long run & short run costs
Economies of scale
Chapter 8, Pure Competition in the Short Run
Pure competition
Perfectly elastic demand
Marginal, total & average revenue
Short run profit maximization
Chapter 9, Pure Competition in the Long Run
Long run profit maximization Long run equilibrium
Chapter 10, Pure Monopoly
Barriers to entry
Economies of scale
Price makers
Price discrimination
Socially optimal price
Chapter 11, Monopolistic Competition & Oligopoly
Monopolistic competition
Short run profit or loss
Long run profit
Oligopoly
Game theory
Price leadership
Cartels & collusion
Kinked demand
Chapter 16, Public Finance: Expenditures & Taxes
Tax incidence
Economics by Example
Chapter 4, Why was the Great Newspaper Heist So Easy? Diminishing Marginal
Utility and the Price Elasticity of Demand.
Chapter 5, How Can Economics Influence Your Choice of a Spouse? Supply,
Demand and Price Signals in the Marriage Market.
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit III: Factor Markets
Allocated time:
2.5 Weeks
Dates:
10/31 – 11/15
Percentage of Exam
10 – 18% (Micro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 12, The Demand for Resources
Marginal revenue product
Marginal product
Marginal resource cost
Chapter 13, Wage Determination
Market demand for labor
Market supply for labor
Monopsony model
Equilibrium wage & employment
Wage differentials
Economics by Example
Chapter 14, Wal~Mart: Friend or Foe? Economies of scale, Low wages, Low prices
& thinking outside the box.
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit IV: Market Failure & the Role of Government
Allocated time:
2.5 Weeks
Dates:
11/16 – 12/6
Percentage of Exam
12 – 18% (Micro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 5, Market Failures: Public Goods & Externalities
Consumer surplus
Producer surplus
Productive efficiency
Allocative efficiency
Public goods
Positive externalities
Negative externalities
Chapter 10, Pure Monopoly
Regulated monopolies
Chapter 16, Public Finance: Expenditures & Taxes
U.S. Tax structure
Chapter 18, Antitrust Policy & Regulation
Natural monopolies
Deregulation
Chapter 20, Income Inequality, Poverty, & Discrimination
Lorenz curve
Gini index
Causes of income inequality
Economics by Example
Chapter 26, What is the role of Government? Political-economic systems, snags in
Private Solutions and remedies with a role of Government.
Nickel & Dimed
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
AP Economics – Macro
Course Overview
AP Economics is a yearlong course divided into two major components: Microeconomics
and Macroeconomics. The second section, Macroeconomics, is the primary focus of the
second semester although we start on macroeconomics at the end of the first semester. The
main areas of concentration include the following economic concepts: national income, price
stabilization levels, economic growth and international economics. Students are expected not
only to know the material but also to apply critical thinking skills to the units covered.
Unit V: Basic Economic Concepts
Allocated time:
1.5 Weeks
Dates:
12/7 – 12/15
Percentage of Exam
8 – 12% (Macro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 1, Limits, Alternatives & Choices
Scarcity
Choice
Positive Economics
Normative Economics
Opportunity Costs
Production Possibilities Curve
Chapter 3, Demand, Supply & Market Equilibrium
Law of Demand
Demand Curve
Changes in Quantity Demanded
Determinants of demand
Law of Supply
Supply curve
Changes in quantity supplied
Determinants of supply
Market Equilibrium
Efficient allocation
Price Ceilings & floors
Chapter 23, An Introduction to Macroeconomics
Savings
Consumption
Future & Current consumption trade off
Demand shocks
Sticky prices
Chapter 26, Business Cycles, Unemployment, & Inflation
Business cycle
Cyclical impact of durables & nondurables
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit VI: Measurement of Economic Performance
Allocated time:
2.5 Weeks
Dates:
12/19 – 1/13
Percentage of Exam
12 – 16% (Macro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 2, The Market System & Circular Flow
Circular flow model
Chapter 24, Measuring Domestic Output & National Income
GDP
Expenditures approach
Income approach
GNP
Nominal GDP
Real GDP
Chapter 26, Business Cycles, Unemployment, & Inflation
Types of unemployment
Full employment
Inflation
CPI
Types of inflation
Economics by Example
Chapter 21, Why do we neglect leisure and cheer for divorce? The divergence of
gross domestic product and measures of well-being.
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit VII: National Income & Price Determination
Allocated time:
2.5 Weeks
Dates:
1/23 – 2/7
Percentage of Exam
10 – 15% (Macro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 27, Basic Macroeconomic Relationships
Income consumption & income savings relationships
Average & marginal propensity to consume
Interest rate investment relationship
Expected rates of return
Real interest rates
Multiplier effect
Chapter 28, The Aggregate Expenditures Model
Equilibrium GDP
GDP & international trade
GDP & the public sector
Equilibrium & full employment GDP
Chapter 29, Aggregate Demand & Aggregate Supply
Aggregate demand curve
Consumer & investment spending
Aggregate supply
Chapter 30, Fiscal Policy, Deficits & Debt
Fiscal policy & AD/AS model
Built in stabilizers`
Public debt
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit VIII: Financial Sector
Allocated time:
1.5 Weeks
Dates:
2/8 – 2/17
Percentage of Exam
15 – 20% (Macro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 14, Rent, Interest & Profit
Economic rent
Perfectly inelastic supply
Interest rates
`
Interest income
Loanable funds theory
Time value of money
Chapter 31, Money, Banking & Financial Institutions
Components of money supply
Federal reserve
Chapter 32, Money Creation
Fractional reserve system
Multiple deposit expansion
Money multiplier
Chapter 33, Interest Rates & Monetary Policy
Demand for money
Equilibrium interest rates
Fed tools
Open market transactions
Reserve ratio
Discount rate
Chapter 34, Financial Economics
Present value
Compound interest
Chapter 36, Current Events in Macro Theory & Policy
Causes of micro instability
Frontline: Madoff
Lords of Finance excerpts
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit IX: Inflation, Unemployment, & Stabilization Policies
Allocated time:
3 Weeks
Dates:
2/27 – 3/16
Percentage of Exam
20 – 30% (Macro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 26, Business Cycles, Unemployment, & Inflation
Inflation
Measurement of inflation
Demand push inflation
Cost pull inflation
Chapter 30, Fiscal Policy, Deficits, & Debt
Public debt
Debt as % of GDP
Bankruptcy
Income distribution
Foreign owned public debt
Crowding out effect
Chapter 35, Extending the Analysis of Aggregate Supply
Short run Philips curve
Long run Philips curve
Disinflation
Laffer curve
Chapter 36, Current Issues in Macro Theory & Policy
Rational expectations theory Economic self correction
Discretionary monetary & fiscal policy
Economics by Example
Chapter 25, How much debt is too much debt? Expenditure smoothing, Ricardian
equivalence, crowding out & investments for the future.
Frontline: Ten trillion & counting
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit X: Economic Growth & Productivity
Allocated time:
1 Week
Dates:
3/19 – 3/23
Percentage of Exam
5 – 10% (Macro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 13, Wage Determination
Real wages
Productivity
Long run trend of real wages
Chapter 14, Rent, Interest & Profit
Role of interest rates
Chapter 23, An Introduction to Macroeconomics
Savings
Future vs. current consumption
Chapter 25, Economic Growth
Determinants of growth
Demand factors
Supply factors
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit XI: Open Economy: International Trade & Finance
Allocated time:
3 Weeks
Dates:
3/26 – 4/13
Percentage of Exam
10 – 15% (Macro)
Readings, Concepts & Activities:
McConnell, Brue
Chapter 24, Measuring Domestic Output and National Income
GDP
GNP
Expenditures approach
Income approach
Chapter 28, The Aggregate Expenditures Model
Net exports
Aggregate expenditures
Chapter 29, Aggregate Demand & Aggregate Supply
Consumer spending
Investment spending
Government spending
Net export spending
Aggregate supply
Chapter 38, The Balance of Payments, Exchange Rates, & Trade Deficits
Balance of payments
Determinants of exchange rates
Flexible exchange rates
Fixed exchange rates
Trade policies
Trade deficits
Economics by Example
Chapter 23, What’s to like about outsourcing? The influence of international labor
markets.
Life & Debt
Walstad problem sets
Morton problem sets & activities
Personal problem sets
Test
Unit XII: Exam Preparation & Review
Allocated time:
3.5 Weeks
Dates:
4/23 – 5/16
Percentage of Exam
100% (Micro & Macro)