AP Economics 1
True
Increasing Opportunity costs are common.
False
Social security payments are made by state and local government.
True
Specialization and trade can make both producers better off even if one of them has an absolute advantage in producing all goods.
True
The largest part of the expenditures of state and local government is on education.
False
The law of demand states that other things constant, if the price of a good rises, the quantity demanded of that good increases.
False
The law of supply states that other things remaining the same, if the price for a good rises, the supply of the good increases.
False
The marginal benefit of a good increases as more of the good is consumed.
True
The number of buyers of grapefruit juice increases and at the same time severe frost decreases the supply of grapefruit juice. The price of grapefruit juice will rise.
False
The opportunity cost of economic growth is less consumption goods in the future.
False
The price elasticity of demand equals the magnitude of the slope of the demand curve.
False
The supply of a good will increase and there will be a movement up along the supply curve of the good if the price of one of its substitutes in production falls.
False
The supply of a storable good is perfectly inelastic.
False
The supply of apples is perfectly elastic on the day of the price change.
True
To chieve the gains from trade, a producer specializes in the product in which he or she has a comparative advantage then trades with others.
True
An inferior good has a negative income elasticity of demand.
False
As summer comes to an end and winter sets in, the demand for and supply of hamburger buns decrease. The price of a hamburger bun definitely remains the same.
True
As the price of a good increases, if the quantity demanded of it remains the same, then demand for the good is perfectly inelastic.
True
Automakers expect the price of an SUV to fall next year. If the demand for SUV's does not change, the equilibrium price of an SUV today will fall and the equilibrium quantity today will increase.
True
Consumption goods and services include a slice of pizza purchased t eat at home.
True
Goods that can be produced at a constant (or very gently rising) opportunity cost have an elastic supply.
True
If a 5 percent increases in price increases the quantity supplied by 10 percent, the elasticity of supply equals 2
True
If all the factors of production are fully employed, the economy will produce at a point on the production possibility curve.
False
If people's incomes fall and all other influences on buying plans remain the same, the demand for computers will decrease and there will be a movement along the demand curve.
True
If the cross elasticity between hamburgers and hot dogs is positive, then hamburgers and hot dogs are substitutes.
False
If the cross elasticity of demand is negative the two goods are substitutes.
False
If the percentage change in the quantity supplied is zero when the price changes, supply is perfectly elastic.
False
If the price increases by 10 percent and the quantity demanded decreases by 8 percent, the price elasticity equals 1.25.
True
If the price of asparagus is below the equilibrium price, there is a shortage of asparagus and the price of asparagus will rise until the shortages dissapear.
True
If the price of coffee is expected to ride next month, the supply of coffee this month will decrease.
True
If the price of tuna increases by 5 percent and the total revenue of tuna producers increases, then the demand for tune is inelastic.
False
If the quantity of ice cream demanded at each price increases, there is a movement along the demand curve for ice cream.
False
In the United States, the richest 20 percent of individuals ear approximately 30 percent of the total income.
True
All production points on the PPF are production efficient.
False
A rise in the price of a computer increases the demand for computers because a computer is a normal good.
True
Above the midpoint of a straight-line demand curve, demand is elastic.
False
All combinations of goods and services on the production possibilities frontier are combinations of allocative efficiency.
True
A gold mine is included in the "land" category of productive resources.
False
A market is any arrangement where buyers and sellers meet face to face.
False
A normal good is a good that has a positive cross elasticity of demand
False
A person has an absolute advantage in an activity if the person can perform the activity at a lower opportunity cost than someone else.
True
A point outside the production possibility curve is unattainable.
False
A production point can be allocative efficient but not production efficient.
False
Firms own the factors of production.
False
Factors of production flow from households to firms through good markets.
False
Marginal benefit is derived from the production possibilities frontier.
False
Moving from one point on the PPF to another point on the PPF has no opportunity cost.
False
Moving from one point on the PPF to another point on the PPF illustrates a free lunch.
False
Other things constant, if the wage rate paid to chefs rises, the supply of restaurant meals will increase.
False
Production possibilities per person in the United States have remained constant during the last 30 years.
True
Rent, wages, interest, and profit are the payments made by firms to households through factor markets.
True
When Sue's income increases, her demand for movies increases. For sue, movies are a normal good.
False
When moving along the PPF, the quantity of CD's increases by 2 and the quantity DVD's decreases by 1, so the opportunity cost is 2 CD's minus 1 DVD.
True
When new technology for producing computers is used by manufacturers, the supply of computers increases.
False
When the demand for skateboards decreases and the supply of skateboards remains unchanged, the quantity supplied of skateboards decreases as the price rises.
True
When the income elasticity of demand is positive, the good is a normal good.
True
When the price of a pizza is $20, 10 pizzas are supplied and when the price rises to $30 a pizza, 14 pizzas are supplied. Using the midpoint method, the price elasticity of supply pizzas is .83
True
When the price of a service increases by 5 percent and the quantity demanded decreases by 5 percent, total revenue remains unchanged.
True
ichael Dell, the person who founded and managed Dell computers, is an example of an entrepreneur.
