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AP Microeconomics Unit 1 Flashcards | StudBud
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AP Microeconomics Unit 1
AP Microeconomics Unit 1
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1
Define Opportunity Cost
The Price of an Alternative Cost
The Value of the Best Alternative
The Value of the Next Best Alternative Forgone
The Alternative Cost
2
Which of the following answer is true about The PPC show below,
Point Q is attainable but undesirible
A technology improv. in the production of watch move the point from P to T
The opport. cost of moving from point S to pint T is the number of watches.
Point R is unattainable but desirable
3
The opportunity cost of producing an additional unit of product A is
The wholesale price of product A
The retail price paid for product A
All of the human and capital resources used to produce product A.
The amount of product B that cannot now be produced because of product A.
4
According to the graph, if a country is producing at point X, the opportunity cost of producing another consumer good is
20 consumer goods
20 capital goods
fewer than 20 capital goods
more than 20 capital goods
5
According to the concept of comparative advantage, a good should be produced where
the cost of real resources used is least
production can ocurr with the lowest increase in employment.
its opportunity costs are least
its explicit cost are least
6
Which of the following is most likely to cause the PPC to shift outward toward Point W?
Shifting
Employing the country's resources more fully
Improving THE technology for the prod. of either consumer or capital goods.
Decreasing production of capital goods.
7
Who has the absolute advante in the production of cars?
U.S.
Peru
Neither
Not enough information
8
Mary can earn $160 as a lawyer. She can earn as a carpenter $20 Which of the following is a correct economic statement?
Mary is three times faster than any carpenter so she should give up her law
When carpenter work for lawyers, they should charge $150 per hour
Mary has a Comp. Adv. in law. She Should specialize as a Lawyer.
Mary has an Abs. and Comp. Advantage in both law and carpentry.
9
The law of increasing opportunity cost is reflected in the shape of the
horizontal production possibilities curve
upward sloping production possibilities curve.
Production possibilities curve concave to the origin.
straight line production possibilities curve
10
In which way does a straight line production possibilities curve differ from a concave production possibilities curve?
A straight line PPC has a constant opportunity cost.
A straight line PPC has a decreasing opportunity cost.
There is no difference between the two production possibilities curves.
A straight line PPC has an increasing opportunity cost
11
Which of the following is NOT a cause of an outward shift of the PPF
Improvements in technology
An increase in the migration of labour
An increase in the labour force from increased immigration
An increase in the productivity of the existing labour force
12
When one decision is made, the next best alternative not select is called
Scarcity
Opportunity Cost
Economic resource
Production
13
The current production for a country is on point c, It can produce more computers by doing which of the following?
Moving to Point E
Moving to point D
Remaing at point C, since computer production is maximized.
Moving to Point A
14
The Production Possibilities Curve will shift leftward because
An increase in inflation
A decrease in working age - population.
An increase in unemployment
A decrease in consumer demand.
15
Which of the following statements about the production possibilities curve is true?
Point D is not attainable given the society's resources
The relative position of Points C and D reflect production alternatives
Elimination of unemployment will move the PPC to the right, closer to E
Point A is not attainable give the society's resources.
16
If the country is currently producing at point C, it can produce more capital goods by moving in the direction of
Point X
Point A
Point w
Point D
17
Which of the following would cause an outward or rightward shift in the production possibilities curve?
An increase in inflation
A decrease in natural resources
An increase in unemployment
An increase in Capital equipment
18
What is an opportunity cost from point A to B?
10 oranges
10 sugar
25 sugar
25 oranges
19
Economic growth can be represented in the PPC by which of the following:
A movement upward on an existing curve
A rightward shift of the curve
A movenment downward on an existing curve
A movement from a point on the curve to a point inside the curve.
20
The crucial problem of economics is
providing social goods and services
enacting a set of laws that protects resources from overuse.
establishing a fair tax system
Allocating scarce productive resources to satisfy wants
21
What can cause a PPC to right shift?
Darth Vader
Technology
Drought
Less educated workers
22
Which of the following would cause the shift in the production Possibility Curve as shown?
Discovery of new resources
A decrease in the demand for good B
An increase in the demand for good A
An increase in intern. tensions that result in more restrictive tariffs.
23
Which of the following problems do all economic systems face?
B. How to decide what to produce, how to produce and for whom to produce
How to decentralize markets
A. How to allocate scarce resources among unlimited wants
A and B
24
Which is not a scarce resource?
Land
Entreprenuership
Captial
Trade
25
opportunity cost
cost of selling a business to begin another
earning the best profit possible
cost of choosing one opportunity or investment over another
cost of operating a business
26
which of the following is true of the concept of increasing opportunity of cost?
It is irrelevant if the PPC is convex to the origin.
It suggests that unlimited wants can be fulfilled.
The uses of resources to produce, some of the others must be sacrificed.
It is unimportant in command economies.
27
What is opportunity cost?
What you pay for with a credit card.
What you give up when you make a choice.
The opportunity to go shopping.
The cost of a good or service.
28
Which of the following would cause an outward shift of the production possibility curve?
An increase in immigration
A decrease in natural resource prices
A decrease in unemployment
An increase in consumer demand
29
What will cause the production possibility frontier to shift outwards
price
technology
unemployment
business
30
Given this information, which of the following statements is correct?
Neither country has a comparative Advantg. in the production of either good
X has a Comp. Advant. in food, whereas Y has a comp. Advantage in clothing
Y has a Comp. Advantg. in food production, wheres X has a comp. Advantg.
X has a Comp. Advantg. in the production of both food and clothing.
31
How Might Point E be attained?
If firms decreased their output of computers
If the nation used more of its scare resources to produce farm products
If improvements in Technology occurred in the computer sector or the farm.
If country's resources were more fully employed
32
If the country is currently producing at Point C to Point D, future economic growth will
not change, but employment will increase.
Increase
Decrease
not change, but inflation will increase
33
What is Opportunity Cost?
What you are going to get
What happened in the past
What you recieved
What you gave up
