AP Macro Unit 1

Refer to Figure A (note: x axis should NOT be valued in $). At a price of $20, which of the following would occur?

• Shortage of 100

• Shortage of 150

• Surplus of 200

• Surplus of 50

• Surplus of 100

Refer to figure A. What would be the effect of a price floor at $60

• It would be ineffective

• A shortage of 50

• Quantity demanded would increse

• a shortage of 100

• a surplus of 100

Which of the following best explains why many US economists support free trade?

• Workers who lose their jobs due to free trade can collect unemployment compensation

• it is more important to reduce global inflation than to reduce domestic unemployment

• workers are not affected by free trade since only domestic businesses suffer

• government can protect domestic industries while encouraging free trade

Demand

• Two goods that are bought and used together

• The more you buy of ANY GOOD the less satisfaction you get from each new unit consumed

• Goods used in place of one another

• The different quantities of goods that consumers are willing and able to buy at different prices

• The different quantities of a good that sellers are willing and able to sell (produce) at different prices

Supply

• Two goods that are bought and used together

• The more you buy of ANY GOOD the less satisfaction you get from each new unit consumed

• Goods used in place of one another

• The different quantities of goods that consumers are willing and able to buy at different prices

• The different quantities of a good that sellers are willing and able to sell (produce) at different prices

Substitutes

• Two goods that are bought and used together

• The more you buy of ANY GOOD the less satisfaction you get from each new unit consumed

• Goods used in place of one another

• The different quantities of goods that consumers are willing and able to buy at different prices

• The different quantities of a good that sellers are willing and able to sell (produce) at different prices

Subsidies

• A government payment that supports a business or market

• The cost of all resources that a seller puts into the production of a good

• As income increases, demand increases

• As income increases, demand decreases

• Quantity demanded is equal to quantity supplied

What is the primary focus of macroeconomics?

• A) Individual consumer behavior

• B) The study of entire economies

• C) The production decisions of a single firm

• D) The pricing strategy of a single product

Which of the following is a key concept in macroeconomics?

• A) Opportunity cost

• B) Supply and demand

• C) Gross Domestic Product (GDP)

• D) Elasticity

What does GDP stand for in macroeconomics?

• A) Gross Domestic Product

• B) General Domestic Production

• C) Gross Domestic Profit

• D) General Demand Price