Unemployment and/or an inefficient allocation of resources

can be illustrated by a point inside the PPC

Profits of peach growers will rise & peach production rises

Which would be a positive economic statement?

the nation’s productivity rose 2.7% in the second quarter

Economic profits and losses:

help determine which industries survive or fail

Human specialization, or the division of labor:

increases output by workers utilizing their specific skills

For a laissez-faire system, which best answers the question, "What goods will be produced?"

A good that returns its producers revenue to cover its costs

The command systems of the Soviet Union and Eastern Europe failed in part because:

difficult to coordinate consumers, resources, & businesses

The competitive market system encourages innovation & technological advance, primarily through:

profitable returns to innovative firms

is concerned with individual agents and specific markets

A firm will earn a positive economic profit if:

its total sales revenue exceeds the sum of all its costs

The scarce productive resources are _____, _____, _____, _____, and wants are _____.

Land, Labor, Capital, Entrepreneurship, unlimited

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AP Microeconomics - Unit 1 Review

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Basic Economic Concepts

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Questions 20

Answers

1
To decide how to use its scarce resources to satisfy economic wants, a market economy relies on
prices
planning
monopoly power
production targets
2
Unemployment and/or an inefficient allocation of resources
causes the production possibilities curve to shift outward
causes the production possibilities curve to shift inward
can be illustrated by a point outside the PPC
can be illustrated by a point inside the PPC
3
The laissez-faire system is characterized by:
widespread use of government price controls
private property rights
centralized decision-making
limited use of capital goods
4
Read the caption:
$240
$290
$250
$245
5
Most choices made are not all-or-nothing choices. As a result, economists generally employ
financial analysis
graphical analysis
average cost curves
marginal analysis
6
Read the text:
Profits of peach growers will rise & peach production rises
Profits of peach growers will fall & peach production rises
Profits of peach growers will rise & peach production falls
Profits of peach growers will fall & peach production falls
7
A PPC that is represented by a straight line rather than the usual bowed shape would indicate
Decreasing opportunity cost
Constant opportunity cost
Absolute and Comparative Advantage
Increasing opportunity cost
8
A production possibility curve might be shifted outward by each of the following EXCEPT
Increase in educational levels of the general population
Increase in immigration
Movement toward a more open approach to free trade
Decrease in unemployment
9
Which would be a positive economic statement?
Americans should buy domestic goods to boost our economy
the minimum wage should be increased to $10.00 per hour
government should provide free housing shelter for homeless
the nation’s productivity rose 2.7% in the second quarter
10
Economic profits and losses:
answers the question "How will the goods be produced?"
are the expected outcomes of a change in dollar votes
help determine which industries survive or fail
answers the question "Who will get the output?"
11
The advent of computers & word processing that eliminated the market for type-writers would be:
specialization
creative destruction
derived demand
the “invisible hand”
12
Which is the most efficient technique for producing the output?
A
D
C
B
13
Human specialization, or the division of labor:
increases output by workers performing a variety of tasks
reduces output by dehumanizing workers
increases output by workers utilizing their specific skills
reduces output by discouraging labor from learning new tasks
14
For a laissez-faire system, which best answers the question, "What goods will be produced?"
A good that returns its producers revenue to cover its costs
Good for which consumers are willing to pay a positive price
Any good whose production using the least-cost technology
Those goods whose long-term profits are greater than average
15
In the diagram, consumer expenditures are represented by:
Flow 1
Flow 4
Flow 3
Flow 2
16
The command systems of the Soviet Union and Eastern Europe failed in part because:
firms made more output than consumers bought causing a glut
prices were set too low in all markets
previously abundant economic resources became scarce
difficult to coordinate consumers, resources, & businesses
17
The competitive market system encourages innovation & technological advance, primarily through:
profitable returns to innovative firms
the process of "dollar voting" gh:
the guiding function of consumer needs and preferences
the government's tax code
18
Microeconomics
solves the problem of scarcity in our world
is concerned with individual agents and specific markets
is not concerned with details, but with the “big picture”
is a basis for “after this therefore because of the” fallacy
19
A firm will earn a positive economic profit if:
it produces its output with the least-cost production method
its total revenue = the total cost of resources
its total sales revenue exceeds the sum of all its costs
it is regulated by government
20
The scarce productive resources are _____, _____, _____, _____, and wants are _____.
Land, Labor, Capital, Entrepreneurship, unlimited
Money, Savings, Production, GDP, unlimited
Money, Savings, Production, GDP, limited
Land, Labor, Capital, Entrepreneurship, limited

AP Microeconomics - Unit 1 Review Flashcards | StudBud