WorksheetsAP Microeconomics Review Units 1 - 3
Total questions: 37
Worksheet time: 23mins
Consumers will buy more of a good when its price is lower and less when its price is higher.
Law of Demand
Law of Supply
Price Floor
Price Ceiling
The point at which the quantity demanded for a product or service is equal to the quantity supplied of that product or service.
Equilibrium
Price Stability
Shortage
Supply
A minimum price consumers are required to pay for a good or service.
Price Ceiling
Market Clearing Price
Equilibrium
Price Floor
A maximum price consumers are required to pay for a good or service.
Price Ceiling
Equilibrium
Market Clearing Price
Price Floor
A market in which a single seller dominates.
Monopolistic Competition
Monopoly
Oligopoly
Perfect Competition
A market structure in which a large number of firms all produce the same product and no single seller controls supply or prices.
Monopoly
Monopolistic Comeptition
Oligopoly
Perfect Competition
What is the Profit Maximizing Formula?
Revenue > Expenses
MR > ATC
MR = MC
AFC + AVC = ATC
What is the difference between Accounting (Normal) Profit and Economic Profit?
Merchandise Costs
Opportunity Cost
Labor Cost
Expenses
According to the Profit Maximizing Formula, how many units should this firm produce?
2
3
4
5
Which of the following is the best definition for Marginal Cost?
The cost of producing more units
The cost of producing one additional unit
Fixed costs
Variable Costs
A change in Fixed Costs affect which of the following? (check all that apply)
AFC
AVC
ATC
MC
Does an increase in Fixed Costs affect a firm's output?
Yes
No
Maybe
Does an increase in Variable Costs affect a firm's output?
Yes
No
Maybe
With which worker does this firm begin to experience Diminishing Marginal Returns?
First
Second
Third
Fourth
What is the best definition for Short Run?
A period of time in which at lease one resource is fixed
A period of time in which all resources can change
A period of 1 to 5 years
A period of 5 or more years
A firm expands its fixed resources and its overall costs of production go down. It is experiencing...
Increasing returns to scale
Constant returns to scale
Negative returns to scale
Which of these is NOT a characteristic of Perfectly Competitive markets?
Many small firms
Virtually identical products
High barriers to entry
No need to advertise
If a firm's Marginal Costs increase, its output will...
Increase
Decrease
Stay the Same
Shut down
In the long run, a Perfectly Competitive Firm will..
Earn zero economic profit
Earn an economic profit
Make an economic loss
Shut down
Which of the following best describes Allocative Efficiency?
D = ATC
D = AVC
D = MC
Run = DMC
What will happen when there is short-term PROFIT in a market?
Firms will enter the market, and prices will rise.
Firms will enter the market, and prices will fall.
Firms will leave the market, and prices will rise.
Firms will leave the market, and prices will fall.
The image above shows a firm making
Economic Profit
Economic loss
Breaking even
Shutting down
Should the following firm shutdown?
Yes
No
Not enough information present
The above figure shows a perfectly competitive firm. If the market price is more than $20 per unit, the firm
will definitely shut down to minimize its losses.
will stay open to produce and will make zero economic profit.
will stay open to produce and will incur an economic loss.
will stay open to produce and will make an economic profit.
might shut down but more information is needed about the fixed cost.
Scarcity is best defined as
the difference between limited wants and limited economic resources.
the difference between the total benefit of an action and the total cost of that action.
the difference between unlimited wants and limited economic resources.
the opportunity cost of pursuing a given course of action.
the difference between the marginal benefit and marginal cost of an action.
A linear production possibilities curve indicates which of the following?
Constant opportunity costs
Decreasing opportunity costs
Increasing opportunity costs
Diminishing marginal returns
Labor-intensive production
According to the graph above, if a country is currently producing at point X, the opportunity cost of producing another consumer good is
20 capital goods
more than 20 capital goods
fewer than 20 capital goods
20 consumer goods
fewer than 20 consumer goods
Beef has been increasing in price. As a result, what will happen to the demand for hamburger buns?
Increase
Decrease
The solid line on the graph represents a _______________, which when implemented cause shortages.
Price ceiling
Price floor
Total revenue -total cost=
average cost
Profit
Marginal cost
Perfectly Competitive, Normal Profit
Single-Price Monopoly, Economic Profit
Profit-Maximizing Quantity
Qf
Qa
