AP Macro Unit 1 Review

Front

In a market economy, prices are generally determined by the interaction between: buyers and sellers, wholesalers and retailers, producers and labor unions, consumers and government officials.

Back

buyers and sellers

Front

Which of the following is likely to increase the demand for peanut butter? Options: Fewer children in the population, News that insects have destroyed much of the peanut crop and that there will be less peanut butter on the shelves in three months., A big increase in the price of jelly., A report from the Surgeon General of the United States that eating peanut butter makes people nutty.

Back

News that insects have destroyed much of the peanut crop and that there will be less peanut butter on the shelves in three months.

Front

In economics, a shortage of a product occurs when: the product's price falls below its market-clearing level, the product's market-clearing level reduces overall demand, the people who buy the product consume more than they need, the businesses producing the product become less efficient

Back

the product's price falls below its market-clearing level

Front

Which country has the comparative advantage in producing trucks and what is their opportunity cost? The US can produce 200 airplanes or 400 trucks. Japan can produce 300 trucks or 100 airplanes.

Back

Japan, 1/3 airplane per truck

Front

Which country has the comparative advantage in producing airplanes and what is their opportunity cost? The US can produce 200 airplanes or 400 trucks. Japan can produce 300 trucks or 100 airplanes.

Back

US, 2 trucks per airplane

Front

Suppliers often reduce prices because they

Back

have a surplus of products to sell

Front

When a point lies inside of the PPF it can be said that: Resources are under employed, Resources are fully utilized, Production is beyond the resource potential, Opportunity cost of production is constant.

Back

Resources are under employed

Front

The opportunity costs seen in a linear PPF would most likely be

Back

1 for 1

Front

What does the Production Possibilities Frontier represent?

Back

The tradeoffs between possible production levels for two goods.

Front

The resource that includes equipment, machinery, buildings, and tools.

Back

Capital