AP Micro EC

price elasticity

When demand is price elastic, an increase in price will increase total revenue.

The demand curve for a normal good slopes down for which of the following reasons? An increase in the price of the good induces consumers to purchase substitute products. An increase in the price of the goods reduces consumers' purchasing power. An increase in the price of the good increases consumers' utility from consuming that good.

1 and 2

Oren's father tells Oren he can have one dessert after dinner. He can choose from a scoop of ice cream, a slice of apple pie, a cup of chocolate pudding, or a piece of fruit. Oren prefers chocolate pudding to a piece of fruit; he prefers apple pie to chocolate pudding; and he prefers ice cream to apple pie. If Oren chooses a scoop of ice cream, what is his opportunity cost?

A slice of apple pie.

Which of the following describes a factor of production that is not fully scarce and that can be used simultaneously in the production of more than one good? Machines that can produce both clothing and bedsheets Unskilled labor needed to produce all goods Basic knowledge that enhances the organization of all manufacturing assembly lines Land that is cultivated for two crops by more than one farmer Labor that has received enhanced training in assembly-line work

Basic knowledge that enhances the organization of all manufacturing assembly lines

Suppose that Habib has a weekly fixed budget and spends it all on music downloads and snacks. At his current combination of consumption, the marginal utility of the last dollar spent on music downloads is greater than the marginal utility of the last dollar spent on snacks. Has Habib maximized his utility?

No, because he can increase his total utility by purchasing more music downloads and fewer snacks.

Which of the following is associated with a command economy? Competitive product markets Use of resources for private gain Use of available resources to meet all the needs and wants of its citizens Entry of firms into industries with economic profit Public ownership of the means of production

Public ownership of the means of production

Which of the following is an example of a scarce factor of production? money food flower airplanes established knowledge

airplanes

Which of the following changes in the demand for and the supply of a good will necessarily result in an increase in both the equilibrium price and quantity of the good in a market?

demand: increase supply: no change

Which of the following is necessary in a well-functioning capitalist economy but not in a command economy? centralized decision making scarcity of resources monopolies protection of property rights positive externalities

protection of property rights

A change in which of the following will cause a change in the supply of personal computers (PC's) in the short run? technology price for pc demand for pc price of disk (complement) consumer income

technology