AP Micro Quiz #1 MC

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

A. 1 only

The basic economic problem of all countries is the existence of: a. tax increases and budget deficits b. limited resources and unlimited wants c. unemployment and inflation d. government and private industry e. unions and monopoly firms

B. limited resources and unlimited wants

An outward shift if the production possibilities curve of an economy can be caused by an increase in: a. unemployment b. the labor force c. inflation d. output e. demand

B. the labor force

An outward shift in the production possibilities curve of an economy can be caused by an increase in: a. unemployment b. the labor force c. inflation d. output e. demand

B. the labor force

Which of the following best defines opportunity cost? a. it is the cost of producing those goods most desired in the economy b. it is the cost of the unlit mix that will lead to the greatest rate of economic growth for a given economy c. it is the amount of one product that must be given up in order to produce an additional unit of another product d. it is the use of the least-cost method of production e. it is the cost of labor used in the production process

C. it is the amount of one product that must be given up in order to produce an additional unit of another product

in order for a good to be considered "scarce" it must meet which of the following criteria: 1. limited 2. desirable 3. efficient a. 1 only b. 2 only c. 3 only d. 1 and 2 only e. 1, 2, and 3

D. 1 and 2 only

Economists consider which of the following to be factors of production? 1. natural resources 2. capital resources 3. human resources 4. money a. 1 only b. 1 and 2 only c. 2 and 3 only d. 1, 2, and 3 only e. 1, 2, 3, 4

D. 1, 2, and 3 only

Economists use the term equilibrium to describe: 1. when individuals are equal 2. when no individual would be better off taking a different action 3. when no individual has incentives to change his or her behavior a. 1 only b. 2 only c. 3 only d. 2 and 3 only e. 1, 2, and 3

D. 2 and 3 only

The table below represents points on an economy's current production possibilities curve. good x good y 1,000 0 990 100 980 200 970 300 the opportunity cost of increasing the production of good Y from 0 to 200 is: a. 1,000 units of X b. 980 units of X c. 200 units of X d. 20 units of X e. 5 units of X

D. 20 units of X

Which of the following government policies would shift a nation's production possibilities curve leftward? 1. decreasing the retirement age 2. increasing restrictions on child labor 3. increasing the requirements for legal immigration a. 1 only b. 2 only c. 1 and 2 only d. 2 and 3 only e. 1, 2, and 3

E. 1, 2, and 3

According to the theory of comparative advantage, an entity will specialize in the production when a. its opportunity cost is zero b. its explicit cost is zero c. its implicit and explicit costs are as close to zero as possible d. its opportunity cost is higher than another entity's in the production of that good e. its opportunity cost is lower than another entity's in the production of that good

E. its opportunity cost is lower than another entity's in the production of that good