AP Macro Unit 1 test

Identify the potential factor of production shown in this photo.

• physical capital

• land

• labor

• risk-taking entrepreneur

Which of the following could be a factor of production?

• human resources

• capital resources

• entrepreneurship

• all of the above

If a good can be made quickly, inexpensively, and using a few, readily available resources, it has

• negative returns.

• inelastic supply.

• elastic supply.

• diminishing returns.

The quantity of a good or service that producers are willing to supply at various market prices can be listed on a supply

• graph.

• schedule.

• curve.

• chart.

Scarcity in economics means:

• The market does not provide an efficient quantity of goods and services.

• the wants of people are limited.

• there must be poor people in rich countries.

• economists are clearly not doing their jobs.

• not having sufficient resources to produce all the goods and services we want.

A production possibilities curve illustrates all the

• technological changes that help to increase production.

• choices a person can make between items.

• economic choices a society can make.

• combinations of two goods or services that can be produced.

The amount of income consumers have available to spend on goods and services is called their

• income effect.

• substitution effect.

• purchasing power.

• marginal power.

France and England both produce wine and cloth under conditions of constant opportunity costs. France will have a comparative advantage in wine production if:

• it can produce more wine than England.

• it can produce more cloth than England.

• the opportunity cost of wine production is higher in France than in England.

• the opportunity cost of wine production is lower in France than in England.

• the opportunity cost of cloth production is lower in France than in England.

Which of the following measures is typically used as an indicator of the conditions in the labor market?

• The unemployment rate

• The population growth rate

• The inflation rate

• The trade deficit

• The rate at which real gross domestic product is changing

If, over a period of time, factors other than price cause an increase in the demand for a product, the demand curve shifts

• downward.

• upward.

• to the right.

• to the left.