AP Macro Unit 1 "Practice Test" – Flashcards
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the forces that make market economies work are
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demand and supply
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a market is a
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group of buyers and sellers of a particular good or service
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a competitive market is a market in which
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no individual buyer or seller has any significant impact on the market price
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which of the following is not a characteristic of a perfectly competitive market?
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all of the above characteristics of a perfectly competitive market
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a monopoly is a market
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with one seller, and that seller sets the price
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to say that the quantity demanded of a good is negatively related to the price of a good is to say that
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an increase in the price of a good leads to a decrease in the quantity demanded of the good
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the negative relationship between price and quantity demanded
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-applies to most goods in the economy -is represented by a downward sloping demand curve -is reffered to as the law of demand **-all of the above ar correct**
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which of the following would not be determinant of the demand for a particular good?
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the prices of inputs used to produce the goods
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each of the following is a determinant of demand except
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technology
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the amount of the good buyers are willing and able to purchase is called the
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demand
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If francis experiences a decrease in his income, we would expect that, as a result, Francis's demand for
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normal goods will decrease
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Currently you purchase 6 packages of hotdogs a month. You will graduate from college in December and you will start a new job in January. You have no plans to purchase hotdogs in January. For you, hot dogs are
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an inferior good
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Two goods are substitues if a decrease in the price of one good
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decreases the demand for the other good
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Two goods are complements if a decrease in the price of one good
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increases the demand for the other good
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When it comes to peoples tastes, economists generally believe that
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tastes are based on forces that are well within the realm of economies
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Suppose today people change their expectations about the future. This change in expectation
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can affect future demand, but not today's demand
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Alyssa rents 5 movies per month when the price is $3.00 per rental and 7 movies per month when the price is $2.50 per rental. Alyssa's demand demonstrates the law of
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demand
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A demand schedule is a table showing the relationship between
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price and quantity demanded
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The line that relates the price of a good to the quantity of that good demanded is called
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demand curve, and it slopes downward as long as the good in question conforms to the law of demand
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Today's demand curve for gasoline could shift in response to
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a change in the expected future price of gasoline
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the side of the maket that deals with the willingness and ability to produce and sell is
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supply
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the relationship between price and quantity supplied is
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positive
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According to the law of supply
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the supply curve for a goos is upward sloping
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A decrease in the supply of televisions is represented by
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a leftward shift of the supply curve for the televisions
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Which of the following events could cause an increase of the supply of ceiling fans?
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the number of sellers of ceiling fans increases
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If the price of a good is low,
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the quantity supplied of the good can be zero
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The supply schedule is a table that shows the relationship between
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price and quantity supplied
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the difference between a supply schedule and a supply curve is that
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a supply schedule is a table and a supply curve is drawn on a graph
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the market supply curve shows
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the total quantity supplied at all possible prices
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the positive relationship between and quantity supplied is called
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a change in supply
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A decrease of the number of sellers in the market causes
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the supply curve to shift to the left
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Lead is an important input in the production of crystal. If the price of lead decreases, other things being equal, we would expect the supply of
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crystal to increase
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A technological advance wil shift the
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supply curve to the right
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A dress manufacturer recently has come to expect higher prices for decreases in the near future. we would expect
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no change is the dress manufacturers current supply, instead, future supply will be affected
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Which of the following events could shift both the demand and supply curve for a good?
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everyone revises upward their expectations of the next month's price of the good
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the unique point at which the supply and demand curves intersect is called
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equilibrium
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It is most accurate to say
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normative statements involve value judgements while positive statements focus on fact
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A circular flow diagram is a model that
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-helps to explain how participants in the economy interact with one another -helps to explain how the economy is organized -incorporates the markets for the factors of production **-all of the above are correct**
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Which of the following is the most accurate statement about production possibilities
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an economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier.
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If an economy is producing efficiently, then
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there is no way to produce more of one good without producing less of another good
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Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that
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The nation is not using all available resources or is using inferior technology or both.
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Macroeconomics is the study of
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How individual households and firms make decisions
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Which of the following is an example of a positive statement?
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Prices rise when the government prints too much money
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Which of these statements is a normative statement?
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all of the above
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Production possibility frontiers are usually bowed outward because
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resources are specialized, some are better at producing particular goods rather than other goods.
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The crucial problem of economics is
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enacting sets of laws that protects resources from over use
