1. Module The Study of Economics1
KRUGMAN'S
MACROECONOMICS for AP*
Margaret Ray and David Anderson

2. What you will learn in this Module:
How scarcity and choice are central to the study of economics
The importance of opportunity cost in individual choice and decision making
The difference between positive economics and normative economics
When economists agree and why sometimes disagree
What makes macroeconomics different from microeconomics

3. Individual Choice: The Core of Economics
Economy
Market economy
Property rights
Marginal analysis

4. Resources Are Scarce Resources (Factors of Production) Land Labor
Capital
Entrepreneurship
Scarcity and society
Examples

5. Opportunity Cost: The Real Cost of Something Is What You Must Give Up to Get It
Why all costs are opportunity costs
Examples

6. Microeconomics Versus Macroeconomics
Economic Aggregates
Microeconomic versus Macroeconomic questions

7. Positive Versus Normative Economics
Positive economics
Normative economics
Examples
Economic model

8. When and Why Economists Disagree
Economists may disagree because they have different values or opinions
Economists may disagree because they use different models or methods to conduct their analysis
Over time, disputes in economics are resolved by the accumulation of evidence (but this can sometimes take a long time!)