AP Macroeconomics Semester 1 Exam

Which of the following describes scarcity?

• Wants are limited.

• Wants exceed resources.

• Resources are unlimited.

• Resources are fully employed.

• Resources are allocated efficiently.

Any point inside a production possibilities curve is

• better than points on the production possibilities curve

• allocatively efficient but technologically inefficient

• associated with inefficient use or unemployment of some resources

• associated with movements along the production possibilities curve

• associated with constant opportunity costs

On the basis of the diagram above showing an economy's production possibilities curve for two goods, which of the following statements must be true?

The opportunity cost of moving from point P to point R is 10 units of Y. The opportunity cost of moving from point R to point P is 8 units of X. The opportunity cost of moving from point Q to point R is 0 units of Y.

• I only

• III only

• I and II only

• II and III only

• I, II, and III

The graph above shows the production possibilities curve for Factory X and Factory Y. If Factory X uses the same amount of resources to produce skateboards and bikes as Factory Y uses, which of the following is true?

• Factory X has an absolute advantage in producing bikes.

• Factory X has an absolute advantage in producing skateboards.

• Factory X has a comparative advantage in producing skateboards.

• Factory Y has a comparative advantage in producing skateboards.

• Factory Y has an absolute advantage in producing skateboards.

The diagram above shows two demand curves for video games identified as D1 and D2.

Which of the following changes will most likely cause a shift of the demand curve from D1 and D2 as shown in the diagram?

• An increase in consumers’ income, assuming that video games are a normal good

• An increase in the price of game consoles, a complementary good

• A decrease in the price of mobile games, a substitute good

• A decrease in the number of buyers in the market

• A decrease in the price of video games

A leftward shift of the supply curve for computers could be caused by which of the following in the short run?

• A decrease in the number of computer manufacturers

• A decease in taxes on computer manufacturers

• A decrease in the price of computers

• A decrease in the price of components used to assemble computers

• An increase in the price of mobile devices, a substitute good

Assume that the market for bottled water is in equilibrium. If both the supply of and the demand for bottled water decrease, what will be the effect on equilibrium price and quantity?

• Price - Decrease / Quantity - Decrease

• Price - Decrease / Quantity - Increase

• Price - Increase / Quantity - Decrease

• Price - Increase / Quantity - Indeterminate

• Price - Indeterminate / Quantity - Decrease

If the production technology of a good improves and at the same time the number of consumers willing and able to buy the good in the market increases, which of the following will definitely occur?

• Equilibrium price will increase.

• Equilibrium price will decrease.

• Equilibrium quantity will increase.

• Equilibrium quantity will decrease.

• Equilibrium quantity will remain the same.

Which of the following is true according to the circular flow model?

• Firms are suppliers in both the product and factor markets.

• Firms are demanders in the product markets and suppliers in the factor markets.

• Households are demanders in both the product and factor markets.

• Households are demanders in the product markets and suppliers in the factor markets.

• The government is a demander in the product market only.

The table below shows a country’s macroeconomic data in 2013.

The country's gross domestic product is

• $220 billion

• $282 billion

• $304 billion

• $309 billion

• $347 billion