AP MACRO UNIT 1 MC

Which of the following is true for all economies regardless of their economic system?

• Every economy must determine what to produce and how it produces goods and services

• Every economy must find a way to distribute income equally

• Every economy must find ways to privatize markets to maximize efficiency

• Every economy must prevent unemployment through government intervention

• Every economy must open free trade with other economies

Which of the following is the best example of physical capital?

• A $100,000 business loan from a bank

• A business hiring 10,000 workers at a factory

• A truck for a delivery company

• An oven for a family of four

• An increase in construction jobs

When making a decision, the next best alternative is called

• The production possibilities

• The opportunity cost

• Scarcity

• The absolute advantage

• Efficiency

Which of the following must be true if an individual's next best alternative to going to the beach is studying for an economics exam?

• They will decide to study for the exam

• The opp. cost is seeing their friends at the beach

• The person prefers playing volleyball at the beach to studying for the exam

• The Opp Cost of going to the beach is all the other things they could have done

• The Opp Cost of going to the beach is being better prepared for the exam.

If the Production possibilities curve (PPC) is concave from the origin (bowed out), then economists say that

• Resources are scarce in the economy

• Resources are not equally suited for the production of both goods

• Economic growth is occurring in the economy

• Resources are being inefficiently used in the economy

• Resources are equally suited for the production of either good

A point outside the PPC would represent

• An efficient use of resources

• Future output once producers become more efficient

• An inefficient use of resources

• A combination that cannot be achieved due to scarcity

• Full employment of resources in the economy

An increase in which of the following would cause an outward shift of the PPC for consumer goods and capital goods?

• An increase in the demand for consumer goods

• An increase in taxes on consumers

• A decrease in unemployment

• An increase in the resources to produce capital goods

• The efficient production of consumer goods

If demand for golf balls decreases when the price of baseball gloves decreases, we can stay that baseball gloves and golf balls players are

• normal goods

• inferior goods

• substitute goods

• complementary goods

• unrelated due to the substitution effect

If the price of cars significantly increases, then the

• Supply of cars will increase

• supply of auto repair shops will decrease

• quantity supplied of cars will increase

• The demand for cars will decrease

• Car producers will find it more profitable to produce trucks

The relationship between quantity supplied and price is ________, and the relationship between quantity demanded and price is _________

• direct, inverse

• inverse, direct

• inverse, inverse

• direct, direct

• strong, weak