stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
AP Microeconomics Review Flashcards | StudBud
Explore
/
AP Microeconomics Review
AP Microeconomics Review
56 terms
·
StudBud Administration
·
3,346 plays
#Economics #AP #Microeconomics
Flashcards
56 cards
F
Practice quiz
P
Host live
L
Questions
56
Answers
1
What causes a shift in a supply curve?
A.Change in price of input, related goods, technology
B. Change in amount of producers, expectations
All of the above
A and B
2
How does society choose to address scarcity?
Deciding FOR WHOM to produce
Deciding WHAT to produce
All of the above
Deciding HOW to produce
3
What market structure does this model convey
B. Perfect competition
C. Monopolistic Competition
A. Monopoly
A and C
4
In perfect competition, what happens in the long-run if a firm is making economic profit?
Firms will wait until the extra-long run to decide
Firms will leave the market
Firms will enter the market
Firms will neither leave nor enter the market
5
What is game theory?
Situation involving a matrix to show outcomes of decisions
All of the above (actually, this time)
Study of interdependence between firms
Demonstrated through "The prisoner's dilemma"
6
What is economies of scale?
When businesses are very large and collude
When AVC (ATC) decrease per unit input (to an extent)
When AVC exceeds MRDARP
When AVC (ATC) increase per unit input (to an extent)
7
Why is perfect competition good for workers and their wages?
It theoretically reduces wage disparities
Firms can often set poor wages/poor standards
Firms would maximize costs by hiring minorities
Firms can't entirely set poor wages, as in monopolies, etc
8
Where is the most efficient point on a PPC?
Anywhere on the curve, regardless of movement
Anywhere under the curve, assuming no shifts
Where the supply/demand curves intersect for both goods
Anywhere above the curve, assuming no shifts
9
True or false: the (textbook) definition of "economics" is the study of scarcity and choice
False
True
10
What is education as a factor?
Labor
Entrepreneurship
Human capital
Natural resource
11
What is deadweight loss and what causes it in perfect competition?
Lost surplus due to Bubba
Lost surplus when market gets heavy
Increase in Surplus due to market intervention
Lost surplus (gains) when market intervention happens, quota
12
What is collusion? (Read all answers VERY carefully-- may be more than one correct answer)
ALL 4 of these
When businesses work together to bolster profits
A form of building trusts, often through price-fixing
An illegal, anti-competitive business practice in the US
13
What is comparative Advantage?
A person is able to produce less of a good than another
A person is able to produce more of a good than another
The opportunity cost to produce is higher than another's
A person's opportunity cost to produce is lower than another
14
When is a business always taking an L in the short run (all market structures)?
When profit is below MC
When profit is below AFC
When profit is above ATC
When profit is below ATC
15
What is "Tit-for-Tat" behavior?
In an oligopoly when producers mimic each others' behavior
In an oligopoly when consumers copy each others' behavior
In a monopoly when companies mimic each others' behavior
In an oligopoly when companies follow dominant strategy
16
What is positive behavior; what is normative behavior?
Being nice; being normal
Subjective logic (ideals); objective logic
All of the above
Objective logic (how econ actually works); subjective logic
17
Where does MC always intersect ATC and AVC?
At Marginal Revenue
Anywhere along their curves
They don't intersect
At their minimum points, respectively
18
What is movement? What is a shift?
Changing position along the curve; changing curve position
Changing curve position; changing position along curve
19
True or false: all costs are fixed in the short run
True
False
20
What is the main difference between a product market and a factor market?
Firms supply in factor market; households supply in product
Households demand in factor; firms demand in product market
Households demand in product market; firms demand in factor
Households supply in factor; firms supply in product market
21
What are characteristics of inelastic curves; what are elastic curve characteristics?
TR increases if P increases; TR decreases if P increases
All of the below
Few subs., little part of income; many subs., much of income
Straight up, necessity; luxury, long-time, flatter
22
True or false: a monopoly is economically efficient
False
True
23
How do you calculate profit?
TVC-TFC=P
TC-TR= P
TR-TC=P
TFC+TC=P
24
At what quantity do you produce? (Both perfect competition AND monopolies)
Where MC=ATC
Where MR= ATC
Where MR=MC
Where ATC=AR
25
A company has a monopoly on expensive utilities: why might this situation prevent market-entry?
Complements are cheaper
Economies of scale
Substitutes are cheaper
Nash Equilibrium
26
If price is below equilibrium, what will occur; what if price is above? (Perfect competition)
Absolutely nothing
Nash Equilibrium; monopolistic competition
Shortage; surplus
Surplus; shortage
27
1. What are complements; 2. what are substitutes?
Bubba slides into mailboxes
Saying nice things; aquatic vessels- "titutes"
Items you often bundle together; similar goods to preferred
Goods similar to preferred item; items you often bundled
28
What are the four factors of production?
Not the red triangle
Land, Labor, Capital, Entrepreneurship
Mike Sawicki, Mike Sawicki, Mike Sawicki, Mike Sawicki
Land, Labor, Liquidity, Corn
29
What is normal profit? What is economic profit on a cost curve graph?
AVC min= MRDARP; Price above ATC
Price charged is above the ATC; price charged is above LRATC
Economic profit=0/ATC min=MRDARP; Price above ATC
All of the above
30
What is absolute advantage
A person has lower opportunity cost to produce than another
A person is able to produce less of a good than another
A person has higher opportunity cost to produce than another
A person is able to produce more of a good than another
31
What is opportunity cost?
Finding if costs outweigh benefits of choise
Not being able to enjoy a burrito because you bought pizza
Buying a burrito
What you give up to make another choice
32
What do direction of shifts indicate?
Left: increasing (unit); Right: Decreasing (unit
Introduction/removal of new resources (general)
Introduction/removal of new technology
Right: increasing (unit); Left: Decreasing (unit)
33
What is a tradeoff?
Bubba is a slacker
Having pizza instead of the nutter butter
Fowler moving to the Cardinals
Giving something up to have another thing
34
Ceteris parabis, what happens to price and quantity when demand SHIFTS to the RIGHT?
Quantity demanded increases, Price decreases
Quantity demanded increases, Price increases
Quantity demanded decreases, Price decreases
Quantity demanded decreases, Price increases
35
What is dominant strategy?
When MR=MC
In game theory, when no decisions are optimal
When you gain money for action X and lose money for action Y
Best choice a firm can do, regardless of other firm actions
36
What Law states that there will be shrinking marginal returns per unit input?
Law of conservation of marginal cost
Law of diminishing marginal returns
Law of Conservation of marginal returns
Law of growing marginal returns
37
How do you calculate Total Revenue?
C. ATC- TP
B. Quantity (x) Price- ATC
B and C are wrong
A. Quantity (x) Price
38
Which is an example of a factor market for apples?
Act of picking apples (labor)
Ladder (physical capital)
All of the above
The apples/land (natural resources)
39
What causes SHIFT in demand?
B.Change in expectations, number of consumers
C.Increasing price per unit output
A and B
A.Change in income, tastes/preferences, price of substitutes
40
What does MRDARP-- the market/equilibrium price in perfect competition-- stand for?
Marginal Revenue, Demand, Average Receipt, Perfect Comp.
Marginal Revenue, Demand, Average Revenue, Price
Mr., Daniel, Anthony, Ronald, Pacific
Marginal Revenue, Supply, Average Total Revenue, Price
41
How many firms are there in a monopoly
Below?
Not here
<--- Keep Looking
Only one-- it has total market control/ is price-setter
42
How does a non-price discriminatory monopolist price his/her good/service?
Where MC=MR
Where MR=D
Where MC=ATC min.
Price of demand above where MC=MR
43
What do Production Possibilites curves look like/represent?
Outward bowing; model shows production/price relationship
Outward bowing; model representing tradeoffs in 2-item econ.
Outward bowing; model shows price/production relationship
Inward bowing; model representing tradeoffs in 2-item econ.
44
What are economic cartels, and what is their legal status in the US?
They are individual firms fighting each other in the market
They are trusts-- they are legal
They are cat posters-- obviously allowed
They are trusts (alliances through collusion) -- are illegal
45
What do price floors do? What do quotas do? How about price ceilings?
Set max quantity; set max price; set min price
Set max price; set max quantity; set min price
Set min price; set max quantity; set max price
Set min price; set max price; set max quantity
46
What is non-cooperative behavior?
When firms collude successfully
What is expected (through rational thought) in game theory
When firms ignore effects of their actions on others's
When the lady in the game show undercut the guy
47
How do businesses legally price discriminate nowadays in the US?
A. By age groups
D. A and C
B. By racial and religious groups
C. Through timing of purchases (I.e. airline tickets)
48
What is consumer surplus?
Area above price/ below supply curve
Area below price/ below supply curve
Area above price/ below demand curve
Area below price/below demand change
49
What is the market structure when there are only a few large businesses in the market?
Monopoly
Monopolistic competition
Perfect competition
Oligopoly
50
What is the only market structure where a firm makes a profit in the long run?
Monopolistic Competition
Oligopoly
Perfect Competition
Monopoly
51
What is the Gini Coefficient; is higher or lower better; what curve is it associated with
Measures inequality; lower; Nash
Measures inequality; higher; Lorenz
Measures political rights; lower; Nash
Measures inequality; lower; Lorenz
52
What are oligopolies?
Largely interdependent
A and C
Few companies that own vast control in a market
All of the above
53
What are efficiency, equity, growth, freedom, stability, and security the basic components of?
The Communist Manifesto
6 Basic Economic Goals of the U.S.
6 "Good Things"
E.U. trade with Russia
54
What is an average product called (we assume a good is this); what is the cheaper alternative?
Normal good; worse product
Normal good; Bubba
Normal good; inferior good
Inferior good; normal good
55
How do you calculate profit when given a Cost- Curve graph?
Multiply Quantity of Input by Quantity Output
Multiply Quantity Output by Price per Unit
Add Quantity Output to Price charged
(None of these)
56
What is a business (firm) in perfect competition?
B and C only
C. A firm produces a standardized good with many substitutes
B. A price-taker
A. A price-setter
