WorksheetsAP Review for Exam 1
Total questions: 16
Worksheet time: 9mins
If this economy devotes all of its resources to the production of bananas, then it will produce
0 bananas and 200 baseballs.
180 bananas and 125 baseballs.
300 bananas and 0 baseballs.
300 bananas and 150 baseballs.
300 bananas and 200 baseballs.
A movement from point C to point D could be caused by
a decrease in society's preference for bananas.
fewer resources available for production of bananas.
workers calling in sick frequently due to pandemic
all answers are causes
none of these answers could cause that
Which of the following events would explain the shift of the production possibilities frontier from A to B?
The economy experienced a technological advance applicable only to batteries.
The economy experienced a general increase in technology.
The economy experienced an economic recession.
The economy experienced an inflationary episode.
The economy experienced a technological advance applicable only to bagels.
Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?
a decrease in unemployment
a general technological advance
a technological advance in the consumer goods industries
an increase in the availability of capital-producing resources
an increase in demand by consumers.
According to the circular flow model, what do households trade to firms for goods and services?
money
land
labor
capital
entrepreneurial ability
The overriding reason as to why households and societies face many decisions is that
resources are scarce.
goods and services are not scarce.
not everyone is wealthy
people, by nature, tend to disagree.
incomes fluctuate with business cycles.
Efficiency means that
society is getting the maximum benefits from its scarce resources.
society is getting the minimum benefits from its scarce resources.
society's goods and services are distributed fairly, though not necessarily equally, among society's members.
society is conserving resources in order to save them for the future.
society's goods and services are distributed equally among society's members.
Which of the following is correct concerning opportunity cost?
Except to the extent that you pay more for them, opportunity costs should not include the cost of things you would have purchased anyway.
To compute opportunity costs, you should subtract marginal benefits from marginal costs.
Opportunity costs and the idea of trade-offs are not closely related.
Rational people should compare various options without considering opportunity costs.
To compute opportunity costs, you should subtract total benefits from total costs.
Sue drinks three sodas during a particular day. The marginal benefit she enjoys from drinking the third soda
can be thought of as the total benefit Sue enjoys by drinking three sodas minus the total benefit she would have enjoyed by drinking just two sodas.
determines Sue’s willingness to pay for the third soda.
is likely different from the marginal benefit provided to Sue by the second soda.
is likely to continue to fall as Sue drinks more and more soda.
All of the above are correct.
The marginal opportunity cost formula should be used to calculate:
comparative advantage
absolute advantage
willingness to pay for stuff
public goods
marginal utility
What are we doing with this formula?
Use it to calculate marginal opportunity cost
Use it to calculate a set of consumer choices
Use it to calculate comparative advantage
Use it to calculate the slope of a PPF
Use it to torture undergraduate college students
Making rational decisions "at the margin" means that people
make those decisions that do not impose a marginal cost.
evaluate how easily a decision can be reversed if problems arise.
compare the marginal costs and marginal benefits of each decision.
always calculate the marginal dollar costs for each decision.
always calculate the marginal utility for each decision.
A rational decision maker takes an action if and only if
the additional benefit of the action exceeds the marginal cost of the action.
the marginal cost of the action exceeds the additional benefit of the action.
the marginal cost of the action is zero.
the opportunity cost of the action is zero.
the marginal benefit of the action is maximized.
Which of the following is true about a pure public good?
If Mr. Klein uses it, you can use it the same way
Public parks are excellent examples
They don't exist in the real world
Private companies enjoy producing them because of the huge profits
Firms can keep free riders from using it if they don't pay for it.
Because they understand comparative advantage, economists generally agree about:
The benefits of free trade
The benefits of government spending
The trade off between labor and leisure
The use of complicated formulas in their teaching
The benefits of Republican leadership
Which of the following is a capital resource?
money to start a business
specific gear needed for workers to do their job
worker qualifications
natural resources
investor funds to seed a business
