AP Economics 2025 (11-20)

Marginal benefit (MB) is the additional ______ received from the consumption of the next unit of a good or service.

• benefit

• cost

• loss

• tax

Marginal cost (MC) is the additional ______ of producing one more unit of output.

• cost

• revenue

• profit

• demand

Marginal analysis involves making decisions based upon weighing the marginal ______ and ______ of that action.

• benefits; costs

• profits; losses

• revenues; expenses

• inputs; outputs

The rational decision maker will choose an action if the marginal benefit is greater than or equal to the marginal cost (MB >= ______).

• MC

• TR

• TC

• AR

Production possibilities refer to the different quantity of goods that an economy can produce with a given amount of ______ resources.

• scarce

• unlimited

• abundant

• free

According to the law of increasing costs, as more of a good is produced, the greater is its ______ (or marginal) cost.

• opportunity

• fixed

• sunk

• average

Absolute advantage is the ability to produce more of a good than all other ______.

• producers

• consumers

• countries

• firms

Comparative advantage is the ability to produce a good at a lower ______ cost than all other producers.

• opportunity

• fixed

• total

• variable

Specialization is the production of goods or performance of tasks based upon ______ advantage.

• comparative

• absolute

• marginal

• opportunity

Productive efficiency is the production of maximum output for a given level of technology and

• resources

• labor

• capital

• demand