AP Macroeconomics Quiz

Based on the information provided above, which of the following must be true?

• Home Nation has an absolute advantage in the production of computers.

• Foreign Nation has an absolute advantage in the production of autos.

• Home Nation has a comparative advantage in the production of autos.

• Foreign Nation has a comparative advantage in the production of computers.

• Neither nation has a comparative advantage.

Based on the information provided above, which of the following are mutually beneficial terms of trade at which both Home and Foreign Nation will be willing to specialize and exchange?

• 1 auto for 1 computer

• 1 auto for 10 computers

• 1 auto for 17 computers

• 1 auto for 20 computers

• 1 auto for 25 computers

If two nations specialize according to their individual comparative advantages and engage in trade, then which of the following must be true?

• Nations would be better off if they were self-sufficient.

• If one nation gains from trade with the other nation, then the other nation will lose.

• Both nations can consume beyond their individual production possibilities.

• Both nations can consume only what they produce.

• Both nations will lose from trade.

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 decrease 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 an economy produces two goods, capital goods and consumer goods. If the production of capital goods increases in the current period, which of the following will occur for the current and future production possibilities curve for consumer goods and capital goods?

• A movement along the current PPC and a leftward shift of the future PPC

• A movement along the current PPC and a rightward shift of the future PPC

• A rightward shift of the current PPC and a leftward shift of the future PPC

• A rightward shift of the current PPC and a rightward shift of the future PPC

• A movement along the current PPC with no shift of the future PPC

If there is a decrease in the price of the coffee beans used to make brewed coffee, how will this affect the equilibrium price and quantity of brewed coffee?

• Equilibrium price will decrease and equilibrium quantity will increase

• Equilibrium price will decrease and equilibrium quantity will not change

• Equilibrium price will decrease and equilibrium quantity will decrease

• Equilibrium price will increase and equilibrium quantity will decrease

• Equilibrium price will increase and equilibrium quantity will not change

Which of the following is an example of a factor of production?

• A want

• A bank

• A bond

• Capital

• Stock

Which of the following changes will most likely cause a shift of the demand curve from to 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

Which of the following changes will most likely result in a movement from point to point along the demand curve?

• A decrease in the number of buyers

• A decrease in the price of video games

• A decrease in the expected future price of video games

• An increase in the negative effects of video games on players

• An increase in the use of video games for educational purposes

The production possibilities curve illustrates which of the following relationships?

• The production of peaches decreases as apple production decreases.

• The production of peaches increases as apple production increases.

• The opportunity cost of peach production decreases as apple production decreases.

• Fruitland cannot produce a combination of 5 units of peaches and 10 units of apples.

• Fruitland can produce only the combinations of peaches and apples illustrated by points and.