Social Studies Curriculum

Economics Framework

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Advanced Placement Economics Course

Course Description

This is a college level course divided into two sections and it is designed to prepare students for the Advanced Placement test.  The first section, microeconomics provides students with a thorough understanding of the principles of economics that apply to the functions of individual decision makers - consumers and producers.  It places primary emphasis on the nature and functions of product markets, and includes the study of factor markets and the role of government. 

Macroeconomics is the second section of the course and provides students with a thorough understanding of the principles of economics that apply to an economic system as a whole.  It places emphasis on the study of national income and price determination and also develops familiarity with economic performance measures, economic growth and international economics.

Course Goals

Advanced Placement (AP) Economics is a course that is designed to prepare students of the Advanced Placement exam.  The objectives for this course and the materials are designated by the Advanced Placement Board and intended to allow for students to achieve at the college level.  The following provides a summary of the expectations in this course and how they correlate to the standards.  Through this course students will:

1. Understand the "economic way of thinking."

2. Understand and use the tools that economists use in making analytic decisions.

3. Develop responsible citizenship.

4. Understand and apply critical thinking skills.

5. Prepare for the advanced placement tests in microeconomics and macroeconomics.

Course Standards and Objectives

In Advanced Placement Economics, the student will:

Standard 1: Scarcity and Choice

Identify the conditions that lead to the problem of scarcity.  Understand that in any economy the existence of limited resources along with unlimited wants results in the need to make choices.

Standard 2: Opportunity Cost and Trade-offs

Apply the concept of opportunity cost to a Production Possibility Curve (PPC).

Standard 3: Economic Systems

Describe and analyze the economic goals of different societies.

Standard 4: Economic Incentives

1. Understand that individuals face motivational rewards and costs in any given situation and attempt to maximize their benefits or minimize their costs.
2. Analyze policy options of an issue, such as protection of endangered species, using the concept of incentives to predict which policies will be effective.
   

Standard 5: Economic Institutions

Analyze the impact of labor unions on wages and employment.

Standard 6: Exchange, Money, and Interdependence

1. Explain how both parties gain from a voluntary exchange.
2. Explain the functions of money.
   

Standard 7: Markets and Prices

Analyze how markets act as rationing forces and how markets allocate resources.

Standard 8: Supply and Demand

1. Understand and apply basic supply and demand analysis to find equilibrium, prices and quantities.
2. Predict the effects of changes in supply and demand on equilibrium, price, and quantity.
   

Standard 9: Competition and Market Structure

Apply price theory concepts to analyze market behavior.

Standard 10: Income Distribution

Understand how prices act as rationing devices, allocate resources, and determine income distribution.

Standard 11: Market Failures

Analyze the effectiveness of government policy in correcting market failures i.e. public goods, externalities, inadequate competition, etc.

Standard 12: Role of Government

1. Analyze political behavior through economic analysis using the theory of public choice.
2. Describe the basic tenets of the public choice model of government behavior.
   

Standard 13: Gross Domestic Product

1. Explain why National Income (NI) equals Gross Domestic Product (GDP).
2. Distinguish real Gross Domestic Product from nominal Domestic Product.
3. Compute Gross Domestic Product, National Income, Personal Income (PI) and Disposable Income (DI) when given data.
4. Compute Gross Domestic Product using expenditure and income approaches.
   

Standard 14: Aggregate Supply and Aggregate Demand

Use AD and AS curves to analyze the effects of macro events on real National output and price level.

Standard 15: Unemployment

1. Identify and define the four types of unemployment.
2. Define the labor force.
3. Determine the rate of unemployment when given data.

Standard 16: Inflation and Deflation

1. Identify who is injured and helped by unanticipated inflation and deflation.
2. Distinguish between demand pull and cost push inflation.
3. Construct a price index from data.
4. Calculate the rate of inflation when given data.

Standard 17: Savings and Investment

Explain how the interest rate is affected by the supply and demand for money.

Standard 18: Monetary Policy

1. Explain how open market operations, discount rate, and reserve requirements are used to expand or contract the money supply.
2. Describe the structure and function of the Federal Reserve System.
3. Use graphs to illustrate how changes in the money supply affects interest rates, investment, employment and price level.

Standard 19: Fiscal Policy

1. Describe how fiscal policy can be used to try to stabilize the economy.
2. Use Aggregate Supply(AS)and Aggregate Demand (AD) to illustrate Keynesian model contractionary/expansionary fiscal policy.
3. Distinguish between automatic and discretionary stabilizers.

Standard 20: Productivity

Describe how per capita income is determined by productivity.

Standard 21: Economic Growth

Describe how growth in productivity is the key to economic growth.

Standard 22: Absolute and Comparative Advantage and Barriers to Trade

1. Distinguish between absolute and comparative advantage.
2. Determine absolute and comparative advantage when given data.
3. Describe, analyze and evaluate the case for free trade.

Standard 23: Exchange Rates and the Balance of Power

1. Use supply and demand curves to show how events affect exchange rates.
2. Describe the effects of appreciation and depreciation on international trade.

Standard 24: International Aspects of Economic Development

1. Analyze economic policies that increase or decrease growth.
2. Evaluate the effect of foreign aid on economic growth.

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