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AP economics basics Flashcards | StudBud
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AP economics basics
AP economics basics
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1
Time, knowledge, capital, labor, and energy are all examples of...
physical resources
forms of income
abstract concepts
scarce resources
2
Which point on the Production Possibilities Curve represents efficiency?
B
A
C
3
If marginal benefit exceeds the marginal cost then people are better off doing _______.
more
nothing
extra
less
4
What would be the opportunity cost of shifting from Point A to Point B?
25 Tonnes of Sugarcane
30 Tonnes of Oranges
40 Tonnes of Oranges
10 Tonnes of Oranges
5
Using the production possibilities curve, unemployment is described as producing at a point...
Outside the PPC curve.
On the exact middle of the PPC curve.
On either end of the PPC curve.
Inside the PPC curve.
6
C to A creates an opportunity cost of...
wine
nothing
cotton
economic growth
7
Any point outside the production possibilities curve...
Is attainable only if prices rise.
Represents unused resources.
I attainable only if prices fall.
Is unattainable.
8
What is the definition of opportunity cost?
The next best alternative that you give up.
All of the choices you could have made but didn't.
The money you spend to buy something.
The chance that you will lose your money.
9
what is a example of opportunity cost?
choosing ice cream over the toy
choosing to have both ice cream and a toy
choosing the toy over ice cream
or you have no clue but still want to get points
10
production possibilities frontier
line on a graph that shows equilibrium
graph that shows how many resources are being used
line on a production possibility graph, shows maximum output
line on graph that shows GDP rate
11
What is the fundamental problem problem of economics?
Scarcity
Supply
Capital
Value
12
How many should the consumer purchase?
40
Unlimited
0
70
13
By definition, an entrepreneur
earns less than an employee
has fewer benefits than an employee
risks more than an employee
works in a larger company
14
A production possibilities frontier is bowed out because not all resources are
priced the same.
equally profitable.
available in equal quantities
equally suited to all types of production.
15
What is scarcity?
Unlimited wants, limited resources
Limited resources
Unlimited resources, limited wants
Unlimited wants
16
What is Productive efficiency?
Where a firm is operating at the lowest average cost it can
Where a firms workers are working at their most productive
When the output of a firm maximises total consumer welfare
The cost after all social externalities are accounted for
17
A production possibilities frontier shows
all possible combinations of two goods an economy can produce.
all the possible production of one particular good.
18
What is productive efficiency?
No resources wasted in production
Using all trade-offs
Combination desired by society
Using the most technology
19
Definition of Economics:
Making optimal choices under conditions of scarcity
Determining an equitable distribution of society's income
20
Every choice has a
flea
consequence
happy ending
bad outcome.
21
What forces people and nations to make economic choices?
scarcity
need for shelter
desire for profit
abundance of goods
22
Points inside the production possibilities curve...
Are unattainable.
Are attainable with full use of resources.
Result in more rapid growth.
Represent unused or misused resources.
23
Entrepreneurs must be willing to
take a risk
take out a loan
24
What could cause a production possibilities curve to move down and to the left?
The use of computer technology speeds up production.
A nation loses land after being defeated in a war.
Prior Baby boom results in a large young adult population
Thousands of investors invest money in a nation’s economy.
25
If the marginal revenue exceeds the marginal cost...
the firm should exit the industry.
the firm should produce the extra unit.
the firm should cease to produce.
the firm should change the product.
26
The slope of a production possibilities frontier
has no economic relevance or meaning.
is always varying.
is always constant.
measures the OC of producing one more unit of a good.
27
How does the table show opportunity cost?
As one product quantity increases, the other decreases
Bikes and computers are both consumer goods
Bikes and computers are both capital goods
Bikes and computers use the same resources
28
What is a source of growth in the production possibilities curve?
Decrease in price of good.
Inflation
Increase in resources.
Improved technology.
29
Entrepreneurs
organizes and operates a business
works for another owner
30
Which letter on the Production possibilities curve represents an impossibility?
C
A
B
31
A point along the Production Possibility Curve is:
impossible to achieve
fully efficient
none of the others
achievable but inefficient
32
What is an example of an opportunity cost?
If I spend my money, I can earn more money next week.
If I have $100, I can buy some new shoes!
If I go to school, I don't give up sleeping.
If I buy a pizza, I can't buy the book.
33
What are the four factors of production?
Water, Air, Earth, Fire
Land, Liberty, Capital Entertainment
Land, Labor, capital, Entrepreneurship
Land, Labor, Capital, Entertainment
34
Which societies experience scarcity?
Traditional economies only
Command economies only
ALL, including the United States
Most, Except developed countries
35
P1 - every choice has an ..........?
opportunity cast
opportunity cost
opportunity sum
opportunity calculation
36
Cost-Benefit Analysis
set of general plans and principles
a value that is not included in the price of a product
how decision makers compare what is sacrificed & gained
how the product will benefit the company
37
What is allocative efficiency?
Producing the maximum amount of goods with certain resources
Producing the combination of goods most wanted by society
Producing the minimum amount of goods with certain resources
Producing the combination of goods least wanted by society
38
An increase in productive capacity can be shown on the production possibilities curve by:
decrease shift to right
decrease shift to left
increase shift to left
increase shift to right
39
Examples of capital resources include...
People and their skills and intelligence
Money
Paper, flowers, soil
Tools, equipment, buildings
40
What is the opportunity cost of the 7th butter?
1/5 guns
5 guns
1/6 guns
6 guns
41
Trade offs are experienced by
Firms
Governments
individuals
Everyone, in different ways
42
What is economics?
How we allocate money to certain policies and the money.
Money, Stock market, and purchasing decisions
The study of how we make decisions with limited resources
How things are made, bought sold and used
