AP Economics Section 1 Review 2/1/21

in a market economy most choices about production and consumption are made by which of the following?

• politicians

• many individuals and firms

• the government

• managers

You can either go to a movie or study for an exam. Which of the following is an opportunity cost of studying for an exam?

• a higher grade on the exam

• the price of a movie ticket

• the cost of paper, pens, books, and other study materials

• the enjoyment from seeing the movie

which of the following situations is explained by increasing opportunity costs?

• more people go to college when the job market is good

• more people do their own home repairs when hourly wages fall

• convenience stores cater to busy people

• there are more parks in crowded cities than in suburban cities

Which of the following is a normative statement?

• the unemployment rate is expected to rise

• individuals purchase more of a good when the prices rise

• the government should increase the minimum wage

falling output (goods and services) in an economy is consistent with which of the following? (a)  

• a recession
• an expansion
• a recovery
• falling unemployment

which of the following is a goal for the macroeconomy?

• inflation

• deflation

• rising aggregate output

see attached for question 7-10.

Suppose the atlantis is a small, islolated island in the south atlantic. the inhabitants grow potatoes and catch fish. the following table shows the maximum annual output combinations of potatoes and fish that can be produced

• Yes I understand that I need to use this table for 7-10 and draw graphs to find answers.

• answer 1 is correct

Atlantis can produce which of the following combinations of output?

• 1,000 lbs of potatoes and 675 lbs of fish

• 600 lbs of potatoes and 600 lbs of fish

• 400 lbs of potatoes and 600 lbs of fish

If Atlantis is efficient in production, what is the opportunity cost of increasing the annual output for potatoes from 600 to 800 lbs?

• 200 lbs of fish

• 300 lbs of fish

• 500 lbs of fish

Which of the following combinations of output is efficient?

• 1,000 lbs of potatoes 0 lbs of fish

• 600 lbs of potatoes 600 lbs of fish

• 400 lbs of potatoes 500 lbs of fish