AP Micro Units 1-4 Review

A person should consume more of something when

• Marginal cost is equal to marginal benefit

• Benefit exceeds cost

• Cost exceeds benefit

• It is cheese (who doesn’t like cheese?)

The basic economic problem facing all societies is

• Opportunity cost

• Unemployment

• Poverty

• Inflation

Human capital includes

• the equipment used by a doctor to cure a patient.

• the money earned by a salesperson.

• the machinery used to weave cloth.

• the workers hired to complete a task.

Every time a decision is made between trade-offs,

The opportunity cost of a decision is

• the best possible way the question could have been decided.

• the most desirable alternative given up for the decision.

• the series of alternate decisions that could have been made.

• the different ways that a different person might have made the decision.

• any other alternative that was not chosen.

Which of the following could cause a PPC to shift left?

• New technology

• Increase in immigration

• More unemployment

• Decrease in the labor force

• Less inflation

An economy operating on its PPC is always

• fully employing all of its resources.

• going to avoid scarcity.

• not fully employing all of its resources.

• a command economy.

• able to produce more goods next year.

When resources are equally suited to the production of either of the two goods on a basic production possibilities curve, one would expect the curve to

• be linear and demonstrate constant opportunity costs.

• bow outward from the origin and demonstrate increasing opportunity costs.

• be vertical or horizontal depending on the goods.

• bow inward toward the origin and demonstrate decreasing opportunity costs.

Which points on the graph represent efficiency in production?

• A, B, and C

• None of these points show efficiency.

• E

• All of these points show efficiency.

• D

If the opportunity cost of good X is an increasing amount of good Y, the PPC would be

• horizontal

• vertical

• a straight line

• bowed outward