Foundations of Economics 5 th Edition, AP*Edition 2011
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1 A Correlation of 5 th Edition, AP*Edition 2011 To the Advanced Placement Topics Microeconomics and Macroeconomics *Advanced Placement, Advanced Placement Program, AP, and Pre-AP are registered trademarks of the College Board, which was not involved in the production of, and does not endorse, these products.
2 , AP, 5 th Edition, 2011 AP ECONOMICS CORRELATION CHARTS This chart correlates the topics as outlined by the College Board with the corresponding chapters and section numbers in, AP* Edition. AP Microeconomics Topics Textbook Correlation I. Basic Economic Concepts Chapters 1, 2, 3, 9 A. Scarcity, choice, and opportunity cost 1.1, 1.2, 3.2 B. Production possibilities curve 3.1 C. Comparative advantage, absolute advantage, specialization, and trade 3.4, 9.1, 9.2 D. Economic systems 2.3 E. Property rights and the role of incentives 1.2 F. Marginal analysis 1.2 II. The Nature and Functions of Product Markets Chapters 4, 5, 6, 7, 8, 12, 13, 14, 15, 16, 17 A. Supply and Demand Chapter Chapter 4 1. Market equilibrium Determinants of supply and demand 4.1, Price and quantity controls Chapter 7 4. Elasticity Chapter 5 a. Price, income, and cross-price elasticities of demand 5.1, 5.3 b. Price elasticity of supply Consumer surplus, producer surplus, and market efficiency 6. Tax incidence and deadweight loss 8.1, , 6.2, 6.3, 6.4 B. Theory of consumer choice Chapter Chapter 12 2
3 , AP, 5 th Edition, Total utility and marginal utility Utility maximization: equalizing marginal utility per dollar Individual and market demand curves Income and substitution effects AP Test Prep Workbook, Chapter 13 C. Production and costs Chapter Production functions: short and long run 2. Marginal product and diminishing returns Short-run costs Long-run costs and economies of scale Cost minimizing input combination AP Test Prep Workbook, Chapters 13 and 18 D. Firm behavior and market structure Chapters 13, 14, 15, 16, Profit Chapters 13, 14 a. Accounting versus economic profits 13.1 b. Normal profit 13.1, 14.2 c. Profit maximization: MR = MC rule 14.1, 15.2, Perfect competition Chapter 14 a. Profit maximization 14.1 b. Short-run supply and shutdown decision c. Behavior of firms and markets in the short run and in the long run 14.1, , 14.3 d. Efficiency and perfect competition Monopoly Chapter 15 3
4 , AP, 5 th Edition, 2011 a. Sources of market power 15.1 b. Profit maximization 15.2 c. Inefficiency of monopoly 15.3 d. Price discrimination 15.4 e. Natural monopoly Oligopoly Chapter 17 a. Interdependence, collusion, and cartels b. Game theory and strategic behavior 17.1, Monopolistic competition Chapter 16 a. Product differentiation and role of advertising b. Profit maximization , 16.3 c. Short-run and long-run equilibrium 16.2 d. Excess capacity and inefficiency 16.2 III. Factor Markets Chapters 18, 19 A. Derived factor demand 18.1 B. Marginal revenue product 18.1 C. Labor market and firms hiring of labor 18.2 D. Market distribution of income 19.1 IV. Market Failure and the Role of Government A. Externalities Chapter 10, 11 Chapters 6, 10, 11, 15, 17, Marginal social benefit and marginal social cost 10.3, Positive externalities 10.1,
5 , AP, 5 th Edition, Negative externalities 10.1, Remedies 10.3, 11.1 B. Public goods Chapter Public versus private goods Provision of public goods 10.2 C. Public policy to promote competition Chapters 15, Antitrust policy Regulation 15.5 D. Income distribution Chapter Equity 6.5, Sources of income inequality 19.1, 19.2 This chart correlates the Advanced Placement Macroeconomics topics as out-lined by the College Board with the corresponding chapters and section numbers in, AP* Edition. AP Macroeconomics Topics I. Basic Economic Concepts Chapters 1, 3, 4, 20, 21, 22 A. Scarcity, choice, and opportunity costs 1.1, 1.2, 3.2 B. Production possibilities curve 3.1 C. Comparative advantage, absolute advantage specialization, and exchange 3.4, 9.2 D. Demand, supply, and market equilibrium 4.1, 4.2, 4.3 E. Macroeconomic issues: business cycle, unemployment, inflation, growth Chapters 20, 21, 22 II. Measurement of Economic Performance Chapters 20, 21, 22, 27, 28 A. National income accounts Chapter 20 5
6 , AP, 5 th Edition, Circular flow 2.3, Gross domestic product 20.1, Components of gross domestic product Real versus nominal gross domestic product 20.2 B. Inflation measurement and adjustment Chapters 22, Price indices 22.1, Nominal and real values Costs of inflation 27.3 C. Unemployment Chapter 21, Definition and measurement Types of unemployment Natural rate of unemployment 21.3, 23.2 III. National Income and Price Determination Chapters 28, 29 A. Aggregate demand Chapter 28, Determinants of aggregate demand 28.2, 29.1, 29.2, Multiplier and crowding-out effects 29.3, 25.3 B. Aggregate Supply Chapter Short-run and long-run analyses 23.1, Sticky versus flexible wages and prices Determinants of aggregate supply 28.1 C. Macroeconomic Equilibrium Chapters 23, 28 6
7 , AP, 5 th Edition, Real output and price level Short and long run Actual versus full-employment output 21.3, Economic fluctuations 28.3 IV. Financial Sector Chapters 25, 26, 27 A. Money, banking, and financial markets Chapters 25, Definition of financial assets: money, stocks, bonds 2. Time value of money (present and future value) 3. Measures of money supply , , Banks and creation of money 26.2, 26.3, Money demand Money market 27.1, Loanable funds market 25.2 B. Central bank and control of the money supply 1. Tools of central bank policy 26.3 Chapters 26, Quantity theory of money Real versus nominal interest rates 22.3 V. Inflation, Unemployment, and Stabilization Policies Chapters 30, 31 A. Fiscal and monetary policies Chapters 31, Demand-side effects 31.2, Supply-side effects Policy mix 31.2,
8 , AP, 5 th Edition, Government deficits and debt 25.3, 31.1 B. Inflation and unemployment Chapter Types of inflation AP Test Prep Workbook, Chapter 27 a. Demand-pull inflation AP Test Prep Workbook, Chapter 27 b. Cost-push inflation AP Test Prep Workbook, Chapter The Phillips curve: short run versus long run 30.1, Role of expectations 30.2, 30.3 VI. Economic Growth and Productivity Chapters 24 A. Investment in human capital 24.2 B. Investment in physical capital 24.2 C. Research and development, and technological progress D. Growth policy 24.4 Chapter 24 VII. Open Economy: International Trade and Finance Chapter 33 A. Balance of payments accounts Chapter Balance of trade Current account Capital account 33.1 B. Foreign exchange market Chapter Demand for and supply of foreign exchange Exchange rate determination Currency appreciation and depreciation 33.2 C. Net exports and capital flows 33.2 D. Links to financial and goods markets
Foundations of Economics 5 th Edition, AP Edition 2011
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