The production possibilities frontier is a map or graph which

shows various combinations of output the economy can produce

If a nation does not have an absolute advantage in producing anything, it

could have a comparative advantage in something

Which of the following are the best examples of substitute goods?

Windows or Mac personal computers

When a PPF is linear it shows

resources are shiftable from the prod of 1 good to another

A circular flow diagram is a model that

explains how the economy is organized

Which occurrence could cause the demand curve to shift to the right?

decrease in the price of a substitute

Which of the following will change a nation's comparative advantage?

a technological advance in producing manufactured goods

What can be said about point D in the PPF?

Its attainable but the economy isnt working a full potential

B represents which of the following

Possible effects of a price floor

A popular model used to illustrate opportunity cost is

the production possibilities frontier

International trade trends to occur whenever

both nations can benefit from trade

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AP Econ - Unit 1 Review

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Unit 1 Review for AP Economics

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Questions 25

Answers

1
The production possibilities frontier is a map or graph which
shows amounts of combinations of resources that can be used
shows areas of the world in which production is possible
shows various combinations of output the economy can produce
shows the frontier beyond which agriculture is unprofitable
2
The discovery of new gold in SA will ___ the price of gold and ___ the quantity of gold traded.
raise:raise
lower: raise
raise: lower
lower: lower
3
If a nation does not have an absolute advantage in producing anything, it
will export raw materials and import finished products
will try to get along without trade
has no comparative advantage either
could have a comparative advantage in something
4
Which of the following sets of goods are most likely to be complementary goods?
football tickets and baseball tickets
automobiles and computers
shoes and pizza
baseballs and baseball gloves
5
Which of the following are the best examples of substitute goods?
personal computers and computer software programs
hot dogs and mustard
milk and cookies
Windows or Mac personal computers
6
Which of the following would NOT be considered a factor of production?
Money
Land
Capital
Labor
7
Another term for factors of production is
outputs
inputs
goods
services
8
When a PPF is linear it shows
resources are shiftable from the prod of 1 good to another
an example of increasing opportunity cost
a truer picture of real life than a bowed out PPF
all of the above
9
If demand moves from D1 to D2, what happens to the equilibrium price?
It increases
It stays the same
It decreases
It only moves if supply shifts as well
10
Revenue received by firms from sales which is not used to pay for factors of production is
profit
wages
rent
interest
11
What can cause an increase in supply?
Price only
Consumer income
Increase in taxes
Number of sellers
12
A circular flow diagram is a model that
explains how banks circulate money in the economy
illustrates cost-benefit analysis
explains how the economy is organized
shows the flow of traffic in an economic region
13
What causes a change in quantity supplied?
Amount of government intervention
Number of Sellers
Price only
Price of Resources
14
Consider a market in equilibrium. Firms who advertise in the market are attempting to shift the
demand curve to the left
supply curve to the right
supply curve to the left
demand curve to the right
15
Another name for goods and services produced by firms is
factors of production
output
inputs
resources
16
Which occurrence could cause the demand curve to shift to the right?
decrease in the price of a substitute
decrease in the price of raw materials
increase in the price of a complement
increase in the price of a substitute
17
Letter A represents which of the following?
Possible effects of a price floor
Surplus
Shortage
Perfect Equilibrium
18
Which of the following will change a nation's comparative advantage?
a technological advance in producing manufactured goods
quotas on imports
a change in consumers' preference for imported goods
a doubling of wages
19
Which of the following points is unattainable on the given PPF?
A
D
B
C
20
Which of the following could cause an increase or decrease in demand?
Consumer Income
Number of Suppliers
Price
Resources
21
What can be said about point D in the PPF?
It is not attainable
I am going to fail this test
To produce at D we will need more technology
Its attainable but the economy isnt working a full potential
22
B represents which of the following
Shortage
Perfect equilibrium
Possible effects of a price ceiling
Possible effects of a price floor
23
The curved shape of the PPF can be explained by
constant cost of production
economic growth
increasing cost of production
scarcity
24
A popular model used to illustrate opportunity cost is
the factors of production
the production possibilities frontier
entrepreneurship
the paradox of value
25
International trade trends to occur whenever
labor is cheaper in one country than in another
both nations can benefit from trade
one nation is self sufficient and making surplus goods
one nation can profit from trade at the expense of the other

AP Econ - Unit 1 Review Flashcards | StudBud