AP Macro Unit 1.3-1.6

What is the definition of comparative advantage?

• The ability of a country to produce a good at a lower opportunity cost than another country.

• The ability of a country to produce more of a good than another country.

• The ability of a country to produce a good using fewer resources than another country.

• The ability of a country to produce a good at a higher quality than another country.

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DOK Level 1: Recall

Which of the following best describes the law of demand?

• As the price of a good increases, the quantity demanded increases.

• As the price of a good decreases, the quantity demanded decreases.

• As the price of a good increases, the quantity demanded decreases.

• As the price of a good decreases, the quantity demanded remains constant.

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DOK Level 1: Recall

Which statement best describes the law of supply?

• As the price of a good increases, the quantity supplied decreases.

• As the price of a good decreases, the quantity supplied increases.

• As the price of a good increases, the quantity supplied increases.

• As the price of a good decreases, the quantity supplied remains constant.

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DOK Level 1: Recall

What is market equilibrium?

• The point where the quantity demanded exceeds the quantity supplied.

• The point where the quantity supplied exceeds the quantity demanded.

• The point where the quantity demanded equals the quantity supplied.

• The point where the price of a good is highest.

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DOK Level 1: Recall

What happens to the demand curve when there is an increase in consumer income, assuming the good is normal?

• The demand curve shifts to the left.

• The demand curve shifts to the right.

• The demand curve becomes steeper.

• The demand curve becomes flatter.

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DOK Level 2: Skill/Concept

If the price of a substitute good increases, what is likely to happen to the demand for the original good?

• The demand for the original good will decrease.

• The demand for the original good will increase.

• The demand for the original good will remain unchanged.

• The demand for the original good will fluctuate randomly.

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DOK Level 2: Skill/Concept

What effect does a technological advancement in production have on the supply curve?

• The supply curve shifts to the left.

• The supply curve shifts to the right.

• The supply curve becomes steeper.

• The supply curve becomes flatter.

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DOK Level 2: Skill/Concept

If the government imposes a tax on the production of a good, what is the likely effect on the supply curve?

• The supply curve shifts to the left.

• The supply curve shifts to the right.

• The supply curve becomes steeper.

• The supply curve becomes flatter.

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DOK Level 2: Skill/Concept

What is disequilibrium in a market?

• A situation where the quantity demanded equals the quantity supplied.

• A situation where the quantity demanded exceeds the quantity supplied or vice versa.

• A situation where the price of a good is stable.

• A situation where the market is perfectly competitive.

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DOK Level 1: Recall

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DOK Level 3: Strategic Thinking