AP Economics - Unit 1 (P1)

When making a decision, the next best alternative is called

• The production possibilities

• The opportunity cost

• Scarcity

• The absolute advantage

• Efficiency

Economics may best be defined as the:

• interaction between macro and micro considerations.

• the efficient use of scarce resources to achieve maximum satisfaction of economic wants.

• empirical testing of value judgments through the use of logic.

• use of policy to refute facts and hypotheses.

• best stocks to invest in.

Which of the following is not a characteristic of a market economy?

• private property

• private businesses

• central planning

• competition

• All are characteristics of a market economy

An economy where people follow the examples of their ancestors, is called a:

• Traditional economy

• Market economy

• Command economy

• Centrally planned economy

• Hybrid economy

The economic problem is that

• resources are limited and wants are limited.

• resources are unlimited and wants are limited.

• resources are limited and wants are unlimited.

• resources are unlimited and wants are unlimited.

• none of the answers

Which of the following is necessary in a capitalist economy but not a command economy?

• Scarcity

• Protection of property rights

• Centralized decision making

• Government ownership of resources

• None of the answers

Your choices in order for how to spend a Saturday:

1) Watch a movie

2) Go to a baseball game

3) Study for economics

What is your opportunity cost of watching a movie?

• Going to a baseball game

• Studying for economics

• Going to a baseball game and studying for economics

• Watching a movie

• There is no opportunity cost

Which of the following is an essential characteristic of a command economy?

• private ownership

• government ownership

• maximization of utility

• businesses decide what to produce

• none of the answers

Which of the following will NOT cause a shift of the PPC?

• high unemployment

• corn fields are destroyed by a tornado

• a new technology is implemented

• the population decreases

• increase in education/training

Which of the following refers to capital as a factor of production?

• machinery

• natural resources

• money

• labor

• business owners