According to the theory of comparative advantage, a good should be produced where

Its opportunity costs are least

How does a straight PPC differ from a concave PPC

It has constant opportunity cost

To be considered scarce an economic resource must be

Limited and desirable, but not free

Assume demand for apples is downward sloping. If the price falls which of the following occur

Larger quantity of apples demanded

Which of the following cause the PPC to shift out

An increase in capital equipment

Which of the following will not change the demand for oranges

A change in the price of oranges

Which of the following will not cause the demand curve for shoes to shift

A decrease in the price of shoes

Which of the following would cause a leftward shift of the PPC

A decrease in working-age population

The crucial problem of economics is

Allocating scarce resources to satisfy unlimited wants

Which of the following is true if the PPC is a curved line concave to the origin

As more of one good is produce more of the other given up

An increase in the price of gasoline will cause the demand curve for tires to do what

To the left, because they are complements

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AP Macro Unit 1 Review

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For the introduction unit to an AP Macroeconomics course

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Questions 21

Answers

1
According to the theory of comparative advantage, a good should be produced where
Production causes the greatest increase in employment
The cost of real resources used is least
Its opportunity costs are least
Its explicit costs are least
2
Which of the following indicates the macroeconomy is achieving its economic goals
Inflation
Economic growth
Deflation
Unemployment
3
If supply for a good increases, what will happen to price and quantity
Both decrease
Price up, quantity down
Price down, quantity up
Both increase
4
How does a straight PPC differ from a concave PPC
It has constant opportunity cost
There is no difference
It has increasing opportunity cost
It has decreasing opportunity cost
5
To be considered scarce an economic resource must be
Limited and desirable, but not free
Limited, free and desirable
Limited and free, but not desirable
Limited, but not free or desirable
6
Assume demand for apples is downward sloping. If the price falls which of the following occur
Smaller quantity of apples is demanded
Demand for apples will decrease
Larger quantity of apples demanded
Demand for apples will increas
7
When one decision is made, the next best alternative not selected is called
Economic resource
Scarcity
Comparative disadvantage
Opportunity cost
8
If supply for a good decreases, what will happen to price and quantity
Price up, quantity down
Both increase
Price down, quantity up
Both decrease
9
Which of the following cause the PPC to shift out
An increase in unemployment
A decrease in natural resources
An increase in inflation
An increase in capital equipment
10
Which of the following will not change the demand for oranges
Change in consumers' incomes
An expectation that the price of oranges will change soon
A change in the price of grapefruit
A change in the price of oranges
11
Which of the following is at its highest at the trough of the business cycle
Inflation
Economic growth
Unemployment
Employment
12
Which of the following goods can be considered scarce
Time
Education
Gold
All 3
13
If demand for a good increases, what will happen to price and quantity
Price down, quantity up
Both increase
Price up, quantity down
Both decrease
14
Which of the following will not cause the demand curve for shoes to shift
A decrease in the price of shoes
Increase in money income of shoe consumers
Widespread advertising campaign for shoes
A change in tastes for shoes
15
If GDP is declining, the economy is most likely in which phase of the business cycle
Trough
Expansionary
Recovery
Contractionary
16
Which of the following would cause a leftward shift of the PPC
An increase in inflation
A decrease in consumer demand
A decrease in working-age population
An increase in unemployment
17
The law of increasing opportunity cost is reflected in the shape of the
straight PPC
PPC convex to the origin
PPC concave to the origin
horizontal PPC
18
If demand for a good decreases, what will happen to price and quantity
Both decrease
Price down, quantity up
Price up, quantity down
Both increase
19
The crucial problem of economics is
Establishing a fair tax system
Developing a price mechanism that reflects relative scarcity
Providing social goods and services
Allocating scarce resources to satisfy unlimited wants
20
Which of the following is true if the PPC is a curved line concave to the origin
Resources are perfectly substitutable between the 2 goods
The prices of the two products are the same
Both products are equally capable of satisfying wants
As more of one good is produce more of the other given up
21
An increase in the price of gasoline will cause the demand curve for tires to do what
To the left, because they are complements
To the right, because they are substitutes
Shift left, because they are substitutes
To the right because they are complements

AP Macro Unit 1 Review Flashcards | StudBud