AP Microecon Final

Front

Which of the following is a defining characteristic of a market economy? Private ownership of resources, Equitable distribution of income, Taxation of personal income, Reliance on public goods, Government-guided resource allocation

Back

Private ownership of resources

Front

As the production of good X increases, what happens to the opportunity cost of producing good X?

Back

It increases, because the production of good Y decreases by greater amounts.

Front

An increase in the supply of good X resulted in an increase in the price and quantity of good Y. It can be concluded that good Y is

Back

a complement for good X.

Front

Which of the following will shift the supply curve for apples to the right? (A) An increase in consumers’ income, (B) An increase in the price of apples, (C) An increase in the wages of apple pickers, (D) A decrease in the rental price for apple harvesting equipment, (E) A decrease in the demand for oranges, a substitute in consumption

Back

A decrease in the rental price for apple harvesting equipment

Front

Which of the following relationships among the price elasticity of demand, change in price, and change in total revenue is consistent? (A) Elastic, Increase, Increase (B) Elastic, Decrease, Decrease (C) Unit Elastic, Decrease, Decrease (D) Inelastic, Decrease, Increase (E) Inelastic, Decrease, Decrease

Back

Inelastic, Decrease, Decrease

Front

Which of the following best describes how a consumer maximizes total utility from the consumption of a bundle of goods and services? (A) By choosing the quantity of each good such that the quantity demanded of each good is equal to the quantity supplied, (B) By choosing the quantity of each good such that the marginal utility from each good is equal to zero, (C) By choosing the quantity of each good such that the price is equal to the marginal revenue, (D) By choosing the level of output where marginal revenue is equal to marginal cost, (E) By choosing the combination of goods such that the marginal utility per dollar spent on the last unit of each good is equal

Back

By choosing the combination of goods such that the marginal utility per dollar spent on the last unit of each good is equal.

Front

The marginal benefit of consuming a good is

Back

the maximum amount a consumer is willing to pay for one more unit of the good

Front

The economic concept of total consumer surplus refers to which of the following? (A) The difference between the quantity of a good or service that people purchase and the amount that they actually consume, (B) The overproduction of goods and services relative to the socially optimal level of output, (C) The sum of the differences between the prices that consumers are willing to pay for a good or service and the price they actually pay, (D) The sum of the differences between the prices that consumers are willing to pay for a good or service and the minimum prices that sellers must receive to offer that quantity, (E) The difference between the quantity demanded and the quantity supplied of a product at a given price

Back

The sum of the differences between the prices that consumers are willing to pay for a good or service and the price they actually pay.

Front

What is the marginal cost of producing the second unit? Options: (A) $50, (B) $60, (C) $70, (D) $90, (E) $180

Back

$50

Front

How many units of output should a firm with the cost and demand curves shown above produce to maximize profit?

Back

Q3