WorksheetsAP Macroeconomics Section 1 Exam Review
Total questions: 31
Worksheet time: 27mins
Name
Class
Date
1.
In a typical business cycle model, which stage immediately follows a trough?
a)
Expansion
b)
Contraction/recession
c)
Peak
2.
The factors of production is / are ___________ needed to produce goods and services.
a)
things
b)
resources
c)
energy
d)
people
3.
If you live on a fixed income, how will you be affected by inflation.
a)
You are hurt because your purchasing power has decreased.
b)
You are helped because your purchasing power has increased.
c)
You are helped because interest rates rise.
d)
You are hurt because interest rates rise.
4.
Which of the following would NOT be considered part of the labor force?
a)
Tyler, a banker who feels he is overqualified for his job.
b)
Savana, who is unemployed but has attended three job interview in the last month.
c)
Ricky, who has a part-time job but wants a full-time job.
d)
Garrett, a stay-at-home dad.
5.
During a recession, which of the following is likely to occur?
a)
an increase in real wages
b)
an increase in production
c)
and increase in the GDP growth rate
d)
an increase in the unemployment rate
6.
What is the size of the Labor Force?
Unemployed (Looking for job) = 20
Retired = 5
Prison = 2
School (full time, not looking for job) = 10
Employed = 180
Unemployed (not looking for job) = 20
Unemployed (Looking for job) = 20
Retired = 5
Prison = 2
School (full time, not looking for job) = 10
Employed = 180
Unemployed (not looking for job) = 20
a)
180
b)
200
c)
220
d)
237
7.
The unemployment rate is calculated as the number of
a)
unemployed persons divided by number of employed persons
b)
persons in the labor force divided by the number of unemployed
c)
unemployed divided by size of the labor force
d)
employed persons divided by number of unemployed persons
8.
The opportunity cost is the value of the _______ that had to be given up f the alternative that was chosen.
a)
all the items
b)
the next best alternative
c)
the least important alternative
d)
everything except the item that was chosen.
9.
Scarcity arises because all societies have
a)
limited productive resources to satisfy unlimited wants
b)
unlimited productive resources to satisfy limited wants
c)
limited needs and unlimited wants
d)
unlimited needs and limited wants
10.
The purpose of the production possibilities curve is to _________.
a)
figure out whether employment is increasing
b)
practice graphing
c)
figure out the most efficient use of resources
d)
examine opportunity cost of coconuts and fish
11.
The crucial problem of economics is
a)
providing social goods and services
b)
allocating scarce productive resources to satisfy unlimited wants
c)
enacting a set of laws that protects resources from overuse
d)
a fair tax system
12.
What does point B represent?
a)
Production at greater than the country's minimum potential
b)
Production is less than the country's minimum potential
c)
Production is greater than the country's maximum potential
d)
Production at the country's maximum potential
13.
How does a straight-line PPC (PPF) differ from a curved PPC (PPF)?
a)
Straight-line shows a constant opportunity cost
b)
Curved shows a constant opportunity cost
c)
Straight-line shows logarithmic drop
d)
PPC always shows no changer
14.
A curved (bowed) PPC has
a)
Constant opportunity cost
b)
No opportunity cost
c)
Infinite opportunity cost
d)
Increasing opportunity cost
15.
The opportunity cost of increasing production from 7 to 9 trucks is
a)
1 boat
b)
2 boats
c)
2 trucks
d)
3 boats
16.
If a mass immigration occurs, the production possibilities curve can shift
a)
No shift
b)
Inward
c)
Outward
d)
Outward on one axis only
17.
Suppose there is a production possibilities frontier (PPF) for wine and cheese. Which of the following situations would shift the PPF inward (toward the origin)?
a)
A. A severe weather event that destroys much of the economy’s productive capacity.
b)
B. Improved education of the work force.
c)
C. Discovery of a new, cheaper source of milk for making cheese.
d)
D. Increased popularity of wine, as compared with cheese.
18.
What does the Production Possibilities Frontier represent?
a)
A. A catalog of all possible production options, represented as percentages.
b)
B. The tradeoffs between possible production levels for two goods.
c)
C. The amount that a society could produce if it devoted all its resources to producing one good.
d)
D. The possible gains from international trade in two or more goods.
19.
When a point lies inside of the PPF it can be said that
a)
Resources are under utilized
b)
Resources are fully utilize
c)
Production is beyond the resource potential
d)
Opportunity cost of production is constant
20.
Along a straight PPC the U.S. can produce at most 20 thousand units of cars and 30 thousand bushels of corn. Along a straight PPC Mexico can produce at most 7 thousand units of cars or 14 thousand bushels of corn. Who has the ABSOLUTE advantage in corn production?
a)
The U.S.
b)
Mexico
c)
Not enough information
21.
What is Japan's opportunity cost of producing 1 unit of chemicals?
a)
1/2 radio
b)
10 radio
c)
4 radio
d)
1/4 radio
22.
The US can produce 1 ton of sugar using 4 acres of land, or they can produce 1 ton of avocados using 6 acres.
Ecuador can produce 1 ton of sugar using 5 acres of land or 1 ton of avocados using 4 acres.
Which country should produce avocados?
Ecuador can produce 1 ton of sugar using 5 acres of land or 1 ton of avocados using 4 acres.
Which country should produce avocados?
a)
Ecuador
b)
US
c)
not enough information
23.
Based on an examination of the graph, what conclusions can be drawn regarding the production possibilities of corn and jeans?
a)
The blue curve indicates a decrease in the capacity to produce both corn and jeans, resulting in economic growth.
b)
The blue curve indicates an increase in the capacity to produce both corn and jeans, resulting in economic growth.
c)
The blue curve indicates an increase in the capacity to produce both corn and jeans, resulting in economic decline.
d)
The blue curve indicates a decrease in the capacity to produce both corn and jeans, resulting in economic decline.
24.
If Spain's opportunity cost for producing wine is 1.5 cars and France's opportunity cost for producing wine is 0.8 cars, which country has a comparative advantage in wine production?
a)
France
b)
Spain
25.
What does point Y represent?
a)
Efficiency
b)
Unattainable / infeasible
c)
Inefficency
d)
Nothing
26.
The opportunity cost of moving from b to d is
a)
7 pizzas
b)
2 coconuts
c)
4 coconuts
d)
0 pizzas
27.
The opportunity cost of moving from F to C is
a)
4 coconuts
b)
3 pizzas
c)
0 coconuts
d)
0 pizzas
28.
A general rise in overall prices is called:
a)
Deflation
b)
Inflation
c)
Consumer Price Index
d)
Federal Reserve
29.
What occurred between June and July of 2016?
a)
Inflation
b)
Hyperinflation
c)
Deflation
d)
Cost-push Inflation
30.
What occurred between 2007 and 2008?
a)
Inflation
b)
Deflation
c)
Hyperinflation
d)
Consumer Price Index
31.
Only producing certain goods instead of everything you need is known as
a)
importing
b)
specialization
c)
balance of trade
d)
absolute advantage
100 %
