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AP Macroeconomics- Unit I Flashcards | StudBud
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AP Macroeconomics- Unit I
AP Macroeconomics- Unit I
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These questions cover the basic ideas presented in Unit I. It is NOT comprehensive.
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1
The "Father of Modern Economics" is:
John Maynard Keynes
Alfred Marshall
Adam Smith
Karl Marx
2
Which of the following is a result of a decrease in supply and increase in demand?
price and quantity both fall
price falls and quantity is ambiguous
price rises and quantity is ambiguous
price is ambiguous and quantity falls
3
These types of statements about how things actually are, rather than how they should be:
Negative
Normative
Realistic
Positive
4
Society faces a tradeoff between inflation and unemployment in the:
Short Run
Business cycle
Economy
Long Run
5
Which of the following characteristics support a good or service with inelastic demand?
Short Run
All of the above
Necessity
Small Portion of Income
6
Which of the following equations represents elastic demand?
Es<1
Es>1
Es=0
Es=1
7
In economics, capital refers to:
Man made goods
Money
Loans
Finance
8
Societies are forced to make choices due to this economic condition?
Fluctuations
Productivity
Scarcity
Efficiency
9
Based on the provided graph: what has happened?
Technology for motor vehicles fell
Technology for food fell
Technology for motor vehicles rose
Technology for food rose
10
Which of the following characteristics support a good or service with elastic demand?
Long Run
Luxury
Large Portion of Income
All of the Above
11
The value of the next best "thing" given up is called:
An opportunity cost
A choice
A sunk cost
A sacrifice
12
Which of the following is the correct shape for an inelastic demand curve?
Downward sloping
Vertical
Upward sloping
Horizontal
13
Those who evaluate choices by comparing the MC and MB are considered:
Rational
Irrational
Organized
Careful Planners
14
An increase in quantity demanded is represented by:
a movement downward along the demand curve
a leftward shift of the demand curve
a rightward shift of the demand curve
a movement upward along the demand curve
15
The PPF shows the various combinations of output that an economy:
Will produce
Should produce
Can produce
Demands
16
What is the shape of the curve which represents constant opportunity costs?
Convex
Linear
Concave
Bowed Out
17
Describe the movement along the PF that represents a free lunch: a movement _________________
to a point inside the PPF
Between two points on the curve
from a point inside the PPF towards a point on the PPF
to a point outside the PPF
18
A decrease in the quantity supplied is represented by:
a leftward shift of the curve
<p>a rightward shift of the curve</p>
a downward movement along the curve
an upward movement along the curve
19
Which point, along the PPF, demonstrates inefficiency?
Point on the curve (a)
Point beneath the curve (x)
Point above the curve (y)
None of the above
20
Which point demonstrates an impossible combination due to available technology & resources?
Point beneath the curve (x)
None of the above
Point above the curve (y)
Point on the curve (a)
21
What is the formula for calculating opportunity cost?
X-M
Loss/Gain
Gain/Loss
M-X
22
Based on the provided graph: what has happened?
None of the above
Decrease in technology and resources
Increase in technology and resources for only computers
Increase in technology and resources
23
What is the key to increasing a nation's standard of living?
Better education system
the business cycle
Growth rate of the money supply
Productivity
24
When the government attempts to increase equality what does it sacrifice?
Resources
Capital
Productivity
Efficiency
25
What obstacles do Economists face, but other scientists do not?
Difficult ro perform experiements in economics
Scientific Method cannot be used in economics
Economics cannot be objective
Difficult to formulate theories in economics
26
The study of the economy as a whole refers to:
Microeconomics
Macroeconomics
Economics
The Dismal Science
27
Which of the following is a concept of microeconomics?
Effect of price changes on one industry
Unemployment
Inflation
Standard of Living
28
Which of the following characteristic(s) supports a good or service with elastic supply?
Can be created quickly
Long Run
Resources are easy to obtain
All of the above
29
According to economists, _______ makes everyone better off.
Trade
Money
Medicine
Housing
30
Which of the following is not a characteristic of the production possibilities frontier?
available technology remains the same
two goods
comparative advantage
amount of resources doesn't change
31
The ppf represents the possible combination of goods and services that an economy:
Can produce
Cannot produce
Should produce
Will produce
32
The PPF is linear when the opportunity costs are:
zero
decreasing
constant
increasing
33
Protectionism can lead to:
Large gains for consumers
Long-run growth
Greater efficiency
Large gains for some producers
34
What is the business cycle?
Irregular fluctuations in economic activity
Regular fluctuations in economic activity
Predictable changes in the economy
relationship between money and inflation
35
All of the following are part of the business cycle except:
Expansion
Peak
Wave
Recession
36
The study of the economy in parts refers to:
Macroeconomics
Economics
Microeconomics
The Dismal Science
37
What happens to equilibrium price and quantity when supply shifts to the right?
price rises and quantity falls
price and quantity both fall
price and quantity both rise
price falls and quantity rises
38
Someone has _________ when they can produce a good faster & better than anyone else.
a Capitalist economy
Absolute Advantage
Free Trade
Comparative Advantage
39
If you are making decisions "on the margin," an economist would say that you are:
Gambling
Rational
Investing
Uneducated
40
The following term is often defined as "an increase in the overall price level."
Inflation
Finance
Capital
Deflation
41
Someone has _________ when they can produce a good with the lowest opportunity cost.
Free Trade
a Capitalist economy
Comparative Advantage
Absolute Advantage
42
Which of the following equations represents inelastic supply?
Es>1
Es<1
Es=1
Es=0
43
Your purchasing power decreases when this occurs:
Inflation
Increase in available credit
Economic Growth
Deflation
44
What is the opportunity cost for moving from pt B to pt C?
2/5
5/2
10
1/10
45
What is the shape of the curve which represents increasing opportunity costs?
Bowed In
Concave
Convex
Linear
46
Which of the following owns the means of production in the circular flow model?
Businesses
None of the choices provided
Goverment
Households
47
which of the following is a result of an increase in both supply and demand?
price is ambiguous and quantity rises
price rises and quantity falls
price falls and quantity rises
price is abiguous and quantity falls
48
Income and normal goods have a(n) ____________ relationship.
Good
Direct
Inferior
Inverse
49
Which of the following is NOT a factor of production?
<p>entrepreneurship </p>
labor
loans
land
50
Approximately what percentage of the world's population faces scarcity?
50%
0%
100%
90%
51
Which of the following equations represents Total Revenue?
Profit-Price
Profit-Cost
Price X Quantity
Cost-Price
52
Which of the following is a result of both a decrease in demand and supply?
price rises and quantity is ambiguous
price is ambiguous and quantity rises
price and quantity both fall
price is ambiguous and quantity falls
53
The PPF is bowed outward when the opportunity costs are:
constant
decreasing
increasing
zero
54
A decrease in supply is represented by:
a downward movement along the curve
an upward movement along the curve
<p>a rightward shift of the curve</p>
a leftward shift of the curve
55
Goods commonly used in place of one another are:
substitute goods
complentary goods
capital goods
consumer goods
56
Which point, along the PPF, demonstrates efficiency?
Point beneath the curve (x)
Point on the curve (a)
Point above the curve (y)
None of the above
57
Which of the following characteristics support a good or service with inelastic supply?
Short Run
All of the above
Resources are difficult to obtain
Goods are perishable
58
Which of the following is not a factor of production?
Land
Labor
Capital
Money
59
What happens to the equilibrium price and quantity when demand shifts to the left?
price rises and quantity falls
price falls and quantity rises
price and quantity both fall
price and quantity both rise
60
An increase in demand is represented by:
a movement downward along the demand curve
a movement upward along the demand curve
a rightward shift of the demand curve
a leftward shift of the demand curve
