AP Microeconomics Review

Front

Scarcity is best defined as

Back

the difference between unlimited wants and limited economic resources.

Front

Assume an economy is using all its available resources efficiently to produce only two goods, X and Y. As more of good X is produced, what happens to the production of good Y?

Back

Less of good Y is produced as resources move from producing good Y to producing good X.

Front

The opportunity cost of increasing production from 4 to 7 boats is

Back

2 trucks

Front

What can cause a production possibilities curve to move to the right? Options: thousands of people move out of the country, an epidemic kills thousands of young men and women, a new invention lowers the cost of production, the population is growing increasingly old

Back

a new invention lowers the cost of production

Front

Who has the absolute advantage for haircuts? Joy gives 2 haircuts and 1 perm. Susie gives 3 haircuts and 2 perms.

Back

Susie

Front

What is the opportunity cost of producing a car in the U.S. if the U.S. can produce 50 cars and 25 tools?

Back

.5 tools

Front

With respect to the circular flow model, businesses provide households with which of the following?

Back

goods, services, and incomes

Front

A breakthrough in nanotechnology allows silicon chips for computers to be produced much more quickly and cheaply. If demand for computers remains unchanged, what will be the effect upon market price and supply?

Back

The supply will rise while the price falls.

Front

All of the following are characteristics of perfectly competitive markets EXCEPT: production is similar in quality, there is a large number of buyers and sellers, there are few barriers to entering the market.

Back

the firm's prices are kept confidential.

Front

According to the Profit Maximizing Formula, how many units should this firm produce?

Back

4