AP Microeconomics / Unit 1: Basic Economic Concepts
1.2 Resource Allocation and Economic Systems
Notes
Economies answer: what to produce, how, and for whom.
- Market economies use prices and private property. Command economies use government planning. Most are mixed.
- Incentives guide choices.
Practice
In a market economy, what to produce is decided mainly by:
Supply and demand.
A mixed economy has:
Most real economies.
Prices in markets act as:
They guide behavior.
Ready for more? Take the Unit 1 test.