AP Microeconomics Flashcards: Resource Allocation and Economic Systems
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Review key ideas with interactive flashcards. This set includes 10 cards to help you master important concepts.
What two components does each economic system use to manage resource allocation?
Each system involves a particular set of institutional arrangements and a coordinating mechanism for allocating scarce resources.
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What two components does each economic system use to manage resource allocation?
Each system involves a particular set of institutional arrangements and a coordinating mechanism for allocating scarce resources.
What is the primary function of an economic system's 'coordinating mechanism'?
The coordinating mechanism's function is to allocate scarce resources and distribute the resulting output.
List the three types of economic systems mentioned that influence resource allocation.
The three economic systems mentioned are command economy, market economy, and mixed economy.
How does a society's economic system affect resource allocation?
The economic system adopted by a society significantly influences how it allocates scarce resources and distributes output.
A factory owner chooses to use robots instead of human labor to make cars. Which basic economic question is being answered?
The owner is answering the question of 'How to produce those goods and services?'
What are 'institutional arrangements' within an economic system?
They are a set of structures within an economic system used for coordinating the allocation of scarce resources and distribution of output.
A country is deciding whether to build more schools or more military bases. Which of the three basic economic questions is it addressing?
It is addressing the question of 'What goods and services to produce?'
If a government decides to distribute food stamps to low-income families, which of the three basic economic questions is it primarily addressing?
It is primarily addressing the question of 'Who consumes those goods and services?'
What is resource allocation?
Resource allocation involves answering three basic questions: What goods and services to produce, how to produce them, and who consumes them.
What are the three basic questions every society must answer regarding its resources?
The three basic questions are: What goods and services to produce? How to produce those goods and services? And who consumes those goods and services?