AP Macro Unit 1 review

Allie is shopping when she finds a pair of running shoes priced at $90. When Allie uses her debit card to pay, it is declined because her balance is insufficient to cover the cost of the running shoes. Allie’s situation best illustrates which economic concept?

• Opportunity cost

• Scarcity

• Trade-offs

Which of the following contributes to the economic problem of scarcity?

• Resources have alternative uses.

• Resources are unlimited.

• Human wants are limited.

Which of the following illustrates the effect of a decrease in an economy’s resources using a production possibilities curve (PPC)?

• The economy’s PPC will shift outward and to the right.

• The economy’s PPC will shift inward and to the left.

• The economy’s PPC will remain the same.

A city government received a $1 million grant to build swimming pools and skating rinks for youth. Based on the data provided in the graph, what is the opportunity cost of building one swimming pool?

• 0.50 skating rink

• 2 skating rinks

• 2 swimming pools

The shape of a PPC illustrates the type of opportunity costs involved in production. What type of costs do PPC1 and PPC2 illustrate?

• PPC1 illustrates constant opportunity costs and PPC2 illustrates increasing opportunity costs.

• PPC1 illustrates increasing opportunity costs and PPC2 illustrates decreasing opportunity costs.

• PPC1 illustrates increasing opportunity costs and PPC2 illustrates constant opportunity costs.

Based on the data provided, which of the following terms of trade are mutually beneficial for the two countries?

• 1 ton of coffee for 3 trucks

• 1 ton of coffee for 4 trucks

• 1 ton of coffee for 5 trucks

Which of the following describes the relationship between price and quantity demanded according to the law of demand?

• Negative relationship, illustrated by a horizontal demand curve

• Positive relationship, illustrated by a downward-sloping demand curve

• Negative relationship, illustrated by a downward-sloping demand curve

Which of the following will cause a movement along the demand curve for chicken, a normal good, resulting in an increase in the quantity demanded?

• • An increase in consumers' income

• • A decrease in the price of chicken

• • A decrease in the number of consumers of chicken

The diagram above shows two demand curves for video games identified as D1 and D2.

Which of the following changes will most likely cause a shift of the demand curve from D1 to D2 as shown in the diagram?

• A decrease in the price of mobile games, a substitute good

• Michael has a comparative advantage in changing tires.

• Michael has an absolute and a comparative advantage in changing oil.

Which of the following changes will increase the demand for bicycles?

• An increase in the price of bicycle helmets, a complementary good

• An increase in the price of scooters, a substitute good

• A decrease in the price of bicycles