ap macro chapter 1 test – Flashcards
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you should decide to go to a movie if
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the marginal benefit of the movie exceeds its marginal cost
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which of the following most closely relates to the idea of opportunity costs
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trade-offs
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which of the following would shift the production possibilities curve from PP1 to PP2
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immigration of skilled workers into the economy
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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?
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A
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other things equal this economy will achieve the most rapid rate of growth if
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it chooses point A
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microeconomics is concerned with
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a detailed examination of specific economic units that make up the economic system
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A total output of 3 units of capital goods and 4 units of consumer goods
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would involve an inefficient use of the economy's scarce resources
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the optimal output of shoes is
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Q2
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which of the following is a microeconomic statement
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the price of personal computers declined 4.7 percent last year
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which of the following will shift the production possibilities curve to the right
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a technological advance that allows farmers to produce more output from given inputs
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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
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all factors other than the price of bananas (for example consumer tastes and incomes) are assumed to be constant
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the four factors of production are
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land, labor, capital, and entrepreneurial ability
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the typical production possibilities curve is
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a downsloping line that is bowed out from the origin
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which of the following terms implies the greatest degree of confidence in an economic generalization
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principle
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if two variables are inversely related then as the value of one variable
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increases, the value of the other decreases
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economics involves marginal analysis because
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most decisions involve changes from the present situation
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a nation's production possibilities curve is bowed out from the origin because
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resources are not generally equally efficient in producing every good
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for this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods it must
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achieve economic growth
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technological advance in producing both capital goods and consumer goods is show by the shift of the production possibilities curve from AB to
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CD
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the main function of the entrepreneur is to
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innovate
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if the economy is producing at production alternative C the opportunity cost of the tenth unit of consumer goods will be
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1/3 of a unit of capital goods
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through specialization and international trade a nation
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can attain some combination of goods lying outside its production possibilities curve
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if the current output of shoes is Q1 then
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society would consider additional units of shoes to be more valuable than alternative uses of those resources
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the process of producing and accumulating capital goods is called
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investment
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the production possibilities curve illustrates that
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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
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economics may best be defined as the
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social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity
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which of the following is a capital resource
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a piece of software used by a firm
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which of the following statements pertains to macroeconomics
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national income grew by 2.7 percent last year
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opportunity costs of producing military goods are
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smaller in duckistan than herbania
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if someone produced too much of a good this would suggest that
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the good was produced past the point where its marginal cost exceeded its marginal benefit
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if the production possibilities curve is a straight line
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economic resources are perfectly substitutable between the production of the two products
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a person should consume more of something when its marginal
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benefit exceeds its marginal cost
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the vertical intercept and slope are
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4 and -1 1/3 respectively
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which of the following is a land resource
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natural gas
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other things equal which of the following would shift an economy's production possibilities curve to the left
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a law requiring mandatory retirement from the labor force at age 55
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for these date the law of increasing opportunity costs is reflected in the fact that
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larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods
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as compared to production alternative D the choice of alternative C would
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tend to generate a more rapid growth rate
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all of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve except
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an increase in the average skill level of all occupational groups
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which of the following lists includes only capital resources and therefore no labor or land resources
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autos owned by a car rental firm; computers at the car rental agency; the vans that shuttle rental customers to and from the airport
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a production possibilities curve shows
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the maximum amounts of two goods that can be produced assuming the full use of available resources
