ap macro chapter 1 test

The production possibilities curve illustrates the basic principle that:

...if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced.

Refer to the diagram. Starting at point A, the opportunity cost of producing each successive unit of tractors is:

2, 4, 6, 8 units of bread

the optimal output of shoes is

Q2

microeconomics is concerned with

a detailed examination of specific economic units that make up the economic system

the typical production possibilities curve is

a downsloping line that is bowed out from the origin

other things equal which of the following would shift an economy's production possibilities curve to the left

a law requiring mandatory retirement from the labor force at age 55

which of the following is a capital resource

a piece of software used by a firm

which of the following will shift the production possibilities curve to the right

a technological advance that allows farmers to produce more output from given inputs

The basic purpose of the other-things-equal assumption is to:

allow one to reason about the relationship between variables X and Y without the intrusion of variable Z

Which of the following is associated with macroeconomics?

an empirical investigation of the general price level and unemloyment rates since 1990

which of the following lists includes only capital resources and therefore no labor or land resources

autos owned by a car rental firm; computers at the car rental agency; the vans that shuttle rental customers to and from the airport

Economic resources are also called:

factors of production

the production possibilities curve illustrates that

if all the resources of an economy are in use more of one good can be produced only if less of another good is produced

for these date the law of increasing opportunity costs is reflected in the fact that

larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods

Money is not an economiy, resource because:

money is not a free gift of nature

which of the following terms implies the greatest degree of confidence in an economic generalization

principle

Which of the following will not produce an outward shift of the production possibilities curve?

reduction of unemployment

When an economy is operating under conditions of full employment, the production of more of commodity A will mean the production of less of commodity B because:

resources are limited

a nation's production possibilities curve is bowed out from the origin because

resources are not generally equally efficient in producing every good

opportunity costs of producing military goods are

smaller in duckistan than herbania

economics may best be defined as the

social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity

if the current output of shoes is Q1 then

society would consider additional units of shoes to be more valuable than alternative uses of those resources

Which of the following is not correct? A typical production possibilities curve:

specifies how much of each product society should produce

Macroeconomics can best be described as the:

study of large aggregates of the economy or the economy as a whole

economics involves marginal analysis because

most decisions involve changes from the present situation

Assume an economy is incurring unemployment. The effect of resolving this problem will be to:

move the level of actual output on to the economy's production possibilities curve.

which of the following statements pertains to macroeconomics

national income grew by 2.7 percent last year

which of the following is a land resource

natural gas

Which of the following is not a main function of the entrepreneur?

to make routine pricing decisions

which of the following most closely relates to the idea of opportunity costs

trade-offs

if the economy is producing at production alternative C the opportunity cost of the tenth unit of consumer goods will be

1/3 of a unit of capital goods

the vertical intercept and slope are

4 and -1 1/3 respectively

other things equal which of the following positions relative to PP1 would be the most likely to result in a future production possibilities curve of PP3 rather than PP2?

A

technological advance in producing both capital goods and consumer goods is show by the shift of the production possibilities curve from AB to

CD

Refer to the tables. Suppose that technology and the quality of resources are the same in both countries. We can conclude that:

Herbania has more resources than Duckistan

For this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods, it must:

achieve economic growth

for this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods it must

achieve economic growth

suppose an economist says that "other things equal the lower the price of bananas the greater the amount of bananas purchased" this statement indicates that

all factors other than the price of bananas (for example consumer tastes and incomes) are assumed to be constant

all of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve except

an increase in the average skill level of all occupational groups

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except:

an increase in the average skill level of all occupational groups.

a person should consume more of something when its marginal

benefit exceeds its marginal cost

through specialization and international trade a nation

can attain some combination of goods lying outside its production possibilities curve

Through specialization and international trade, a nation:

can attain some combination of goods lying outside its production possibilities curve.

The study of economics is primarily concerned with:

choices which have to be made concerning the use of scarce resources

if the production possibilities curve is a straight line

economic resources are perfectly substitutable between the production of the two products

which of the following would shift the production possibilities curve from PP1 to PP2

immigration of skilled workers into the economy

The slope of the typical production possibilities curve:

increases as one moves southeast along the curve.

if two variables are inversely related then as the value of one variable

increases, the value of the other decreases

the main function of the entrepreneur is to

innovate

the process of producing and accumulating capital goods is called

investment

Unemployment:

is illustrated by a point inside the production possibilities curve.

other things equal this economy will achieve the most rapid rate of growth if

it chooses point A

the four factors of production are

land, labor, capital, and entrepreneurial ability

as compared to production alternative D the choice of alternative C would

tend to generate a more rapid growth rate

Opportunity costs exist because:

the decision to engage in one activity means forgoing some other activity

if someone produced too much of a good this would suggest that

the good was produced past the point where its marginal cost exceeded its marginal benefit

you should decide to go to a movie if

the marginal benefit of the movie exceeds its marginal cost

a production possibilities curve shows

the maximum amounts of two goods that can be produced assuming the full use of available resources

o linear production possibilities curves for countries Alpha and Beta. We can conclude that:

the opportunity cost of shelter is greater in Alpha than it is in Beta

which of the following is a microeconomic statement

the price of personal computers declined 4.7 percent last year

A total output of 3 units of capital goods and 4 units of consumer goods

would involve an inefficient use of the economy's scarce resources