AP Macro Unit 1 Knowledge Check
The table above shows the maximum amount of trucks or coffee that China and Malaysia can produce using the same amount of resources. Based on the data provided, which of the following terms of trade are mutually beneficial for the two countries?
1 ton of coffee for 4 trucks
A city government received a $1$1 million grant to build swimming pools and skating rinks for youth. Based on the data provided in the graph, what is the opportunity cost of building one swimming pool?
2 skating rinks
Which of the following will increase the market supply for new automobiles?
An increase in subsidies to automobile manufacturers
Which of the following changes will increase the demand for bicycles?
An increase in the price of scooters, a substitute good
Country XX is a major buyer of Country YY's grains. Assume Country XX's government announced an increase in taxes on its imports of Country YY's grains effective next month. How will this news likely affect consumers' demand for grains in Country XX?
It will increase now because the tax on imported grains will increase the future price of grains.
Michael and Martha run a mechanic shop. In one hour Michael can perform eight oil changes or change ten tires. In one hour Martha can perform seven oil changes or change fourteen tires. Michael and Martha have the same amount of resources. Given this information which of the following is true?
Michael has an absolute and a comparative advantage in changing oil.
Which of the following describes the relationship between price and quantity demanded according to the law of demand?
Negative relationship, illustrated by a downward-sloping demand curve
What type of opportunity costs do PPC1 and PPC2 illustrate?
PPC1 illustrates increasing opportunity costs and PPC2 illustrates constant opportunity costs.
Which of the following describes the relationship between price and quantity supplied according to the law of supply?
Positive relationship, illustrated by an upward-sloping supply curve
Which of the following contributes to the economic problem of scarcity?
Resources are limited
Allie is shopping when she finds a pair of running shoes priced at $90. When Allie uses her debit card to pay, it is declined because her balance is insufficient to cover the cost of the running shoes. Allie's situation best illustrates which economic concept?
Scarcity
Based on the information in the table, which of the following is true?
Simone has an absolute advantage in trimming trees and mowing lawns.
Which of the following is not considered an economic resource?
Stocks
Which of the following illustrates the effect of a decrease in an economy's resources using a production possibilities curve (PPC)?
The economy's PPC will shift inward and to the left.
Assume household income has fallen dramatically in Country X and the cost of construction materials for building new houses has increased. How will these changes affect the equilibrium price and equilibrium quantity for new houses?
The equilibrium price will be indeterminate, and the equilibrium quantity will decrease.
Matcha green tea is primarily cultivated by Japanese farmers. Suppose that Matcha green tea grows in popularity as its health benefits, namely its lower caffeine content, become known, and at the same time the government reduces taxes imposed on Japanese tea farmers. What is the likely effect on the equilibrium price and equilibrium quantity in the Japanese Matcha tea market?
The equilibrium price will be indeterminate, and the equilibrium quantity will increase.
When the price of a candy bar is $6.00$6.00, which of the following is true?
The market does not clear because the price is higher than the equilibrium price and there will be a surplus in the market.
Two nations sign a trade agreement expecting to enjoy mutual gains from the trade of a certain good. How will this event likely affect the supply of the good in the two nations?
This event will likely cause an increase in the supply of the good in both nations.