AP Econ Unit 1 Practice

Economics is the study of...

• how businesses produce goods and services
• the efficient use of scarce resources
• the equitable distribution of wealth
• the printing and circulation of money

"There is no such thing as a free lunch means?"

• marginal benefit is greater than marginal cost
• businesses can increase market share by offering free lunch
• scarce resources have alternative uses or opportunity costs
• consumers often ask for free lunch

A major principle of economic thinking is

• weighting marginal benefit vs.marginal cost
• equating self interest
• validity of normative economics
• recognizing the abundance of economic resources

The lower the price of the product, the greater the quantity consumed is based on 

• post hoc fallacy
• ceteris parabis
• law of demand
• marginal utlity

The production of more goods, the development of new technology, and the development of a higher standard of living are associated with what economic goal

• Economic Equity
• Economic Efficiency
• Full Employment
• Economic Growth

Which economic goal is associated with the idea we want to get the maximum benefit at the minimum cost from the limited productive resources

• Economic Security
• Economic Freedom
• Economic Growth
• Economic Efficiency

When two economic goals are in direct conflict with one another 

• its impossible to quantify both goals
• there is a trade off between goals
• the two goals are not accepted as important
• the attainment of one goals results in the additional attainment of the other goal

When we look at the aggregate of the economy the analysis at the level would be called

• microeconomics
• positive economics
• macroeconomics
• normative economics

Which would be studied in microeconomics

• the output of the entire economy
• total number of workers employed by the entire economy
• general price levels in the US
• the output and price of wheat in the US

Which of the following is a normative economic statement

• the CPI rose 5.6% last month
• the unemployment rate of 6.8% is too high
• the average loan IR is 8.6%
• the economy grew at an average rate of 2.6%