Which of the following is an example of positive economics?

If price increases, quantity demanded will increase.

Why is the American economy considered to be a "mixed" economy?

It is a market economy with government involvement.

What does TINSTAAFL refer to?

There is a cost for everything.

Instead of mowing a lawn for $15 or babysitting for $20, you watch TV. What's opportunity cost?

Something you could buy for $20

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AP Economics Chapter 1 Review

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Prepare for the Chapter 1 Test. #economics #microeconomics #circularflow #marketstructures #economicsystems

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Questions 17

Answers

1
Unemployment is probably most likely in which economic system?
traditional
command
market
mixed
2
Land, labor, capital, and entrepreneurship are
natural resources
goods and services
factors of production
economic systems
3
The government makes most economic decisions in which economic system?
command
mixed
traditional
market
4
Which of the following is an example of positive economics?
The United States should open trade with Cuba.
If price increases, quantity demanded will increase.
Americans should support universal health care.
Consumers should not overeat at buffet restaurants.
5
Pitfall Three: When choosing, be sure to ignore
opportunity costs
marginal costs and benefits
sunk costs
positive economic principles
6
Pitfall One: We should measure costs and benefits as absolute amounts, not as
marginal amounts
quantitative amounts
averages
proportions
7
Which of the following is the best example of capital found at a taxi company?
taxi cab
owner of the taxi company
taxi driver
cab fares paid by customers
8
Why is the American economy considered to be a "mixed" economy?
The economy is constantly going up or down.
It is halfway between traditional and market economies.
It is a market economy with government involvement.
It does not resemble any of the three main economic systems.
9
Which of the following is the best example of LAND?
Lambeau Field
silver
Mountain Dew
cotton towel
10
Pitfall Four: Decisions should not be based upon
macroeconomic principles
averages
marginal costs and benefits
microeconomic principles
11
What does TINSTAAFL refer to?
Points inside the production possibilities curve are bad.
There are ways to shift the production possibilities curve.
There is a cost for everything.
The circular flow model describes our economy well.
12
Which of the following is NOT one of the basic economic questions every society must answer?
How to produce?
What to produce?
For whom to produce?
Why to produce?
13
Economic freedom is strongest in which economic system?
traditional
market
command
mixed
14
Pitfall Two: When making choices, do not
ignore opportunity costs
use normative economic principles
forget marginal thinking
identify sunk costs
15
Instead of mowing a lawn for $15 or babysitting for $20, you watch TV. What's opportunity cost?
Something you could buy for $35
$35
Something you could buy for $20
$20
16
Which of the following would be studied by a microeconomist?
trends in the value of the dollar versus the Euro
relationship between inflation and unemployment
power of fiscal policy vs. monetary policy to end recessions
market for broccoli
17
In the circular flow model, households sell the factors of production to businesses in the
resource market
product market
household market
labor market

AP Economics Chapter 1 Review Flashcards | StudBud