Ap Macro 1 Review

When making a decision, the next best alternative is called

• The production possibilities

• The opportunity cost

• Scarcity

• The absolute advantage

• Efficiency

If the Production possibilities curve (PPC) is concave from the origin (bowed out), then economists say that

• Resources are scarce in the economy

• Resources are not equally suited for the production of both goods

• Economic growth is occurring in the economy

• Resources are being inefficiently used in the economy

• Resources are equally suited for the production of either good

A point outside the PPC would represent

• An efficient use of resources

• Future output once producers become more efficient

• An inefficient use of resources

• A combination that cannot be achieved due to scarcity

• Full employment of resources in the economy

An increase in which of the following would cause an outward shift of the PPC for consumer goods and capital goods?

• An increase in the demand for consumer goods

• An increase in taxes on consumers

• A decrease in unemployment

• An increase in the resources to produce capital goods

• The efficient production of consumer goods

If demand for golf balls decreases when the price of baseball gloves decreases, we can stay that baseball gloves and golf balls players are

• normal goods

• inferior goods

• substitute goods

• complementary goods

• unrelated due to the substitution effect

If the price of cars significantly increases, then the

• Supply of cars will increase

• supply of auto repair shops will decrease

• quantity supplied of cars will increase

• The demand for cars will decrease

• Car producers will find it more profitable to produce trucks

The relationship between quantity supplied and price is ________, and the relationship between quantity demanded and price is _________

• direct, inverse

• inverse, direct

• inverse, inverse

• direct, direct

• strong, weak

Which of the following will NOT cause the demand for video games to change?

• a change in the price of a close substitute

• a change in consumer incomes

• a change in the price of video games

• a change in consumer tastes

• a change in consumer preferences

A leftward shift of the supply curve for avocados ( a normal good) might be caused by:

• an improvement in avocado picking techniques

• a decrease in the wages that must be paid to avocado pickers

• an increase in consumer incomes

• some avocado farmers leaving the market

• a news report stating that avocados are associated with good health

Assuming Ramen is an inferior good, a decrease in income will shift the:

• supply curve for Ramen to the left

• supply curve for Ramen to the right

• demand curve for ramen to the right

• demand curve for ramen to the left

• there is no shift