ap micro exam review

Of the feasible and efficient points on the production possibilities curve (PPC) shown, producing at which point will lead to the most economic growth in the future? Point M Point N Point J Point R Point S

Point N

For an economy with a straight-line production possibilities curve, which of the following must be true? The opportunity cost of producing another unit is constant. Resources are completely adaptable to alternative uses. Resources are used efficiently. 3 only 1 only 2 only 1 and 2 2 and 3

1 and 2

According to the graph, if a country is currently producing at point X, the opportunity cost of producing another consumer good is 20 capital goods fewer than 20 consumer goods 20 consumer goods more than 20 capital goods fewer than 20 capital goods

20 capital goods

Based on the production possibilities curve for books and pencils shown, what is the opportunity cost of producing a book? 1/10 of a pencil 3 pencils 1/3 of a pencil 10 pencils 30 pencils

3 pencils

Assume an economy uses one input, labor, to produce two goods, X and Y, with constant opportunity cost. Which of the following would cause a parallel shift to the right of the production possibilities curve (PPC) ? A reduction in the unemployment of labor An increase in the amount of labor available for production An increase in the productivity of labor with respect to producing good X An increase in the demand for good X and good Y A change in consumer tastes from good Y to good X

An increase in the amount of labor available for production

A linear production possibilities curve indicates which of the following? Labor-intensive production Increasing opportunity costs Decreasing opportunity costs Constant opportunity costs Diminishing marginal returns

Constant opportunity costs

In which of the following situations is a good NOT scarce? Consumer can purchase as much of the good as they want at its current market price. Large quantities of the good are available in the marketplace. There is a surplus of the good at some positive price. There is a shortage of the good at some positive price. Consumer give up nothing to obtain more of the good.

Consumer give up nothing to obtain more of the good.

As more wheat is produced, how will the opportunity cost of producing wheat, as represented in Figures 1 and 2, be affected? Figure 1- does not change; Figure 2- increases Figure 1- does not change; Figure 2- decreases Figure 1- decreases; Figure 2- increases Figure 1- increases; Figure 2- decreases Figure 1- increases; Figure 2- does not change

Figure 1- does not change; Figure 2- increases

The diagram shows the production possibilities curve for Country Y. Which of the following statements is true? If Country Y is producing at point C, it is using all its resources efficiently. Producing at point C is the most preferable, because butter is a nondurable good. The economy is not producing at its potential, since it is not producing at point D. The opportunity cost of producing more machines is constant. Country Y cannot produce at point E.

If Country Y is producing at point C, it is using all its resources efficiently.

Which of the following is true of an economy's production possibilities curve? It is bowed out (concave to the origin) when marginal opportunity costs are constant. It shows the alternative combinations of goods that can be produced by fully employing scarce resources. It shows the combinations of any two resources that can be used to produce an efficient level of output. It must be a straight line when all resources are fully employed. It is bowed in (convex to the origin) because of changing levels of technology.

It shows the alternative combinations of goods that can be produced by fully employing scarce resources.

Assume an economy is using all its available resources efficiently to produce only two goods, X and Y. As more of good X is produced, what happens to the production of good Y? More resources will need to be devoted to producing good Y. The production of good Y also increases. Less of good Y is produced as resources move from producing good Y to producing good X. There will be no loss of good Y produced. The economy can only produce more of good X if there is more labor available.

Less of good Y is produced as resources move from producing good Y to producing good X.

A country produces computers and rice. If resources are fully employed and there is technological progress only in the production of rice, the opportunity costs of producing computers and rice will change in which of the following ways? The opportunity cost of computers does not change; the opportunity cost of rice decreases The opportunity cost of computers decreases; the opportunity cost of rice increases The opportunity cost of computers increases; the opportunity cost of rice decreases The opportunity cost of computers decreases; the opportunity cost of rice decreases The opportunity cost of computers increases; the opportunity cost of rice increases

The opportunity cost of computers increases; the opportunity cost of rice decreases

According to the production possibilities curve, which of the following is true? The opportunity cost of producing another unit of good X in terms of good Y decreases as more of good X is produced. The opportunity cost of producing another unit of good Y in terms of good X decreases as more of good Y is produced. The opportunity cost of producing another unit of good X in terms of good Y increases as more of good X is produced. The opportunity cost of producing another unit of either good remains constant as the production of the other good increases. The opportunity cost of producing another unit of good Y in terms of good X increases as more of good Y is produced.

The opportunity cost of producing another unit of either good remains constant as the production of the other good increases.

Improvements in technology for producing all goods must result in a flatter production possibilities curve an outward shift in the production possibilities curve a steeper production possibilities curve greater unemployment of labor an inward shift in the production possibilities curve

an outward shift in the production possibilities curve

Based on a comparison of points X, Y, and Z, the opportunity cost of an additional consumer good is highest at point X the same at points X, Y, and Z highest at point Z lowest at point Y highest at point Y

highest at point Z

A production possibilities curve is bowed out, indicating increasing opportunity cost because of differences in consumer tastes the law of diminishing marginal utility the existence of unemployment imperfect adaptability of resources to alternative uses the law of demand

imperfect adaptability of resources to alternative uses

The basic economic problem of all economies is essentially one of deciding how to make the best use of limited resources to satisfy limited wants limited resources to satisfy unlimited wants unlimited resources to satisfy unlimited wants unlimited resources to satisfy limited wants limited resources to provide public goods

limited resources to satisfy unlimited wants

Individuals in any society must make choices regarding the types of goods and services to be produced because resources must be allocated for the benefit of the entire society free markets do not always allocate resources efficiently opportunity costs increase as more of a good or service is produced free markets only satisfy the demands of paying consumers resources are scarce and human wants are unlimited

resources are scarce and human wants are unlimited

The study of economics exists because people are confronted with the basic problem of negative externality monopoly overabundance scarcity elasticity

scarcity

As a factor of production, capital refers to tools and machinery used to produce goods and services stocks and bonds issued by businesses to raise funds money available to start a business currency in circulation and deposits in financial institutions financial investment of businesses

tools and machinery used to produce goods and services