AP Macro Economics Unit 5

Which of the following is a fundamental characteristic of the market system?

• property rights

• central planning by government

• unselfish behavior

• government-set wages and prices

The thing you give up to pursue the next best alternative is

• capital

• product allocation

• opportunity cost

• relative distribution

Two alternative production possibility frontiers for apples and wheat are shown in the figures. As more wheat is produced, how will the opportunity cost of producing wheat, as represented in Figures 1 and 2, be affected? 

• Figure 1: Decrease / Figure 2: Increase

• Figure 1: Increase / Figure 2: Decrease

• Figure 1: No Change / Figure 2: Increase

• Figure 1: No Change / Figure 2: Decrease

The process of producing and purchasing capital goods, often confused with the microeconomic concept of buying stocks and bonds, etc. 

• Full employment

• Economic Growth

• Productive Efficiency

• Investment

Trade allows each country to take advantage of _________________ in the other country. 

• economies of scale

• lower opportunity costs

• specialization

• worker productivity

If a consumer shifts consumption from Combo B to Combo A for oranges, what is the opportunity cost?

• 5 apples

• 10 oranges

• 15 apples

• 20 oranges

Why is opportunity cost important in decision-making?

• It helps in identifying unlimited resources

• It ensures maximum profit

• It helps in evaluating the cost of alternatives

• It eliminates the need for choices

Which of the following is a key component of the Aggregate Demand curve in macroeconomics?

• A) Consumption

• B) Supply

• C) Technology

• D) Labor

In the context of macroeconomics, what does the Phillips Curve illustrate?

• A) The relationship between inflation and unemployment

• B) The relationship between supply and demand

• C) The relationship between interest rates and investment

• D) The relationship between GDP and national debt

What is the primary tool used by the Federal Reserve to control inflation?

• A) Taxation

• B) Open market operations

• C) Government spending

• D) Wage controls