Cao AP Lab

AP Macroeconomics · Unit 1 · Topic 1.1

Scarcity

Unlimited wants, limited resources. In four short case studies you'll see the choices scarcity forces on everyone, from your Saturday to a bakery's night shift.
Case study 1 · Opportunity cost

Your Saturday

You have 8 free hours and 17 hours of things you'd like to do. Tap activities to plan your day.

What you want to do17 hours

Your Saturday0 of 8 hours

Case study 2 · Factors of production

No bread without all four

A loaf of bread takes four kinds of resources. Drag each factor onto the part of the bakery it describes, or tap a factor and then a spot.

Factors

The siteThe lot and the wheat fieldDrop a factor here
The workThe baker at the benchDrop a factor here
The machineThe ovenDrop a factor here
The organizerThe owner who opened the shopDrop a factor here

The bakery

  • Land
  • Labor
  • Capital
  • Entrepreneurship

0 of 4. Can't bake yet.

Case study 3 · The three economic questions

Run the bakery tonight

Two bakers, six hours each: 12 baker-hours. A tray of bread takes 1 hour and a tray of pastries takes 2. Scarce hours force three decisions.

What to produce?

Drag the point along the line, or use the slider. More pastries means less bread.

8 trays of bread2 trays of pastries

Each extra tray of pastries costs 2 trays of bread.

Tonight's possibilities

0369121518024681012Bread (trays)Pastries (trays)8 bread · 2 pastries
  • Tonight's crew: 12 baker-hours

How to produce?

You have $150 for one upgrade tonight. Same bakery, different mix of resources.

Try both, then drag the point. Which upgrade wins depends on what you bake.

For whom?

Tonight you baked 10 trays. The counter's customers want 14 and Café Bella wants 12. Drag to split them.

16 trays of wants go unmet tonight, however you split it. Every tray sent to Café Bella is one the counter doesn't get.

Case study 4 · Scarcity vs. shortage

Raise the price

It's 8 AM and the bakery has 40 croissants. No more can be baked today. Set the price and watch who gets one.

Price of a croissant

Your challenge: find the lowest price that ends the shortage.

Shortage On

45 people want one at $1.00 and can't get one.

Scarcity Always on

Flour, ovens, and bakers' hours are still limited. A price decides who gets the croissants. It can't make more.

85Want one at this priceQuantity demanded
40On the shelfQuantity supplied
45ShortageWanted, not there
  • Gets one 40
  • Wants one, goes without 45
  • Won't pay $1.00 15

Now sort it out

Drag each statement into the right box, or tap a statement and then a box.

ScarcityNever goes away
Drop statements here
ShortagePrice is too low
Drop statements here

Lab summary

Each case study unlocks one big idea

  1. Opportunity cost

  2. Factors of production

  3. The three questions

  4. Scarcity vs. shortage