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WorksheetsAP Macroeconomics Unit 1 (Mods 1-4)
Total questions: 44
Worksheet time: 32mins
Name
Class
Date
1.
Oil is this type of scarce resource.
a)
Human Capital
b)
Land/Natural
c)
Labor
d)
Physical Capital
2.
Columbia and Mexico both produce wine and cars under conditions of constant opportunity costs. Columbia will have a comparative advantage in car production if:
a)
it can produce more cars than Mexico.
b)
the opportunity cost of car production is lower in Columbia than in Mexico.
c)
its labor productivity in car production is greater than Mexico's.
d)
it can produce more wine than Mexico.
3.
A company that makes baseball caps is underutilizing its resources. What does this mean?
a)
The company is running more efficiently than its competitors.
b)
The company is paying its employees less than it should be.
c)
The company is making caps when it could be making t-shirts instead.
d)
The company is producing fewer caps than it could be.
4.
What can cause a production possibilities frontier to shift away from the origin?
a)
Thousands of people move out of the country.
b)
A new technology used in production.
c)
An epidemic kills thousands .
d)
The population is growing increasingly old.
5.
A country’s production possibilities increase because the available workers become more skilled at their jobs. This is an example of growth caused by
a)
Land
b)
Labor
c)
Capital
d)
Entrepreneurship
6.
Although water is very abundant in most places, it is scarce because:
a)
it has no alternative uses.
b)
there is not enough of it to meet all needs at zero cost.
c)
it is a free good.
d)
scarce goods in general are not all that costly.
7.
Both nations will gain from trade when 1 tire trades for:
a)
1/3 radio.
b)
1/2 radio.
c)
1 1/2 radios
d)
2 radios
8.
Economics is the study of...
a)
how businesses produce goods and services
b)
the efficient use of scarce resources
c)
the equitable distribution of wealth
d)
the printing and circulation of money
9.
"There is no such thing as a free lunch means?"
a)
marginal benefit is greater than marginal cost
b)
businesses can increase market share by offering free lunch
c)
scarce resources have alternative uses or opportunity costs
d)
consumers often ask for free lunch
10.
When we look at the aggregate of the economy the analysis at the level would be called
a)
microeconomics
b)
positive economics
c)
macroeconomics
d)
normative economics
11.
Which would be studied in microeconomics
a)
the output of the entire economy
b)
total number of workers employed by the entire economy
c)
general price levels in the US
d)
the output and price of wheat in the US
12.
Which of the following is a normative economic statement
a)
the CPI rose 5.6% last month
b)
the unemployment rate of 6.8% is too high
c)
the average loan IR is 8.6%
d)
the economy grew at an average rate of 2.6%
13.
The most fundamental economic problem is
a)
Scarcity
b)
Taxation
c)
Unemployment
d)
Freedom
14.
If a country has a comparative advantage over another country it is said that
a)
Country A can produce more than Country B
b)
Country A should not trade with Country B
c)
Country A can produce at a lower opportunity cost than Country B
d)
Country A and Country B have no direct relationship to each other
15.
Which of the following is the best definition of opportunity costs?
a)
the amount of one good that must be given up in order to produce one more unit of another good
b)
the amount of an input that must be used in order to produce one more unit of a good
c)
the price of a good that must be charged in order for a merchant to sell one more unit
d)
none of the above
16.
Human Capital is best defined as
a)
motivation and equipment
workers have access to
b)
technology and
infrastructure humans build
c)
the knowledge and skill that
make a worker productive
d)
a factory
17.
In a typical business cycle model, which stage immediately follows a trough?
a)
Expansion
b)
Contraction/recession
c)
Peak
18.
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.
19.
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.
20.
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
21.
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
22.
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
23.
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
24.
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
25.
A curved (bowed) PPC has
a)
Constant opportunity cost
b)
No opportunity cost
c)
Infinite opportunity cost
d)
Increasing opportunity cost
26.
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
27.
The opportunity cost of increasing production from 7 to 9 trucks is
a)
1 boat
b)
2 boats
c)
2 trucks
d)
3 boats
28.
If a mass immigration occurs, the production possibilities curve can shift
a)
No shift
b)
Inward
c)
Outward
d)
Outward on one axis only
29.
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.
30.
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
31.
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
32.
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
33.
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
34.
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.
35.
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
36.
What does point Y represent?
a)
Efficiency
b)
Unattainable / infeasible
c)
Inefficency
d)
Nothing
37.
The opportunity cost of moving from b to d is
a)
7 pizzas
b)
2 coconuts
c)
4 coconuts
d)
0 pizzas
38.
The opportunity cost of moving from F to C is
a)
4 coconuts
b)
3 pizzas
c)
0 coconuts
d)
0 pizzas
39.
A general rise in overall prices is called:
a)
Deflation
b)
Inflation
c)
Consumer Price Index
d)
Federal Reserve
40.
What occurred between June and July of 2016?
a)
Inflation
b)
Hyperinflation
c)
Deflation
d)
Cost-push Inflation
41.
What occurred between 2007 and 2008?
a)
Inflation
b)
Deflation
c)
Hyperinflation
d)
Consumer Price Index
42.
Only producing certain goods instead of everything you need is known as
a)
importing
b)
specialization
c)
balance of trade
d)
absolute advantage
43.
Which of the following is an example of a positive statement?
a)
Unemployment is higher this year than it has been in the last 5 years.
b)
Unemployment benefits help lift people out of poverty.
c)
Free education helps alleviate the problem of unemployment.
d)
The government should provide jobs to those who are unemployed to lower the unemployment rate.
44.
Statements of opinion: "Minimum Wage should be $50/hour."
a)
normative
b)
positive
c)
micro
d)
macro
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