AP Microeconomics Multiple Choice Questions

Economics is a social science that

• is primarily concerned with money

• is primarily concerned with how resources are used

• relies solely on the scientific method for analysis

• is primarily concerned with maximizing spiritual well-being

• is purely normative

Macroeconomics focuses on

• government and its laws that affect commerce

• individuals and their resource use

• corporations and their production levels

• the resource use of the entire nation

• money

Given the table below what is the opportunity cost of wheat in France? Labor hours needed to produce a unit of: Country Wheat Cloth France 5 10 England 20 20

• ½ cloth

• ½ wheat

• 2 cloth

• 2 wheat

• ¼ cloth

Given the table below, which statement is true? Labor hours needed to produce a unit of: Country Wheat Cloth France 5 10 England 20 20

• England has the absolute advantage in both products

• France should specialize in and export wheat while England should specialize in and export wheat

• France has the comparative advantage in wheat

• England has the comparative advantage in wheat

• France has the absolute advantage in wheat while England has the absolute advantage in cloth

Which of the following statements is positive?

• An economy that produces more butter than guns is better off than an economy that produces more guns than butter

• Nations should concentrate their resources on producing wholesome consumer goods as opposed to the weapons of war

• The production possibilities frontier is concave to the origin because of the law of increasing costs.

• Nations ought to devote at least some of their resources to national defense.

• Nations would do better by producing toward the middle of their production possibilities frontiers as opposed to the extreme points near the axes.

The primary focus of microeconomics is

• families and how they make money.

• firms and how they make profits.

• individual units within the overall economy.

• government.

• small countries.

Economists use the term “capital” to mean

• money.

• plant and equipment.

• where the central government is located.

• the center of the economy.

• a major idea.

Land refers to

• all productive resources.

• all natural resources.

• farmland only.

• real estate.

• chattels.

What you give up to pursue another alternative is known as

• capital.

• land.

• money cost

• the price of the product

• opportunity cost.

Given the following table (combinations that can be produced using resources fully and efficiently) Apples | Oranges 0 | 20 7 | 10 14 | 0 the opportunity cost of apples is

• 10/7 oranges

• 7/10 oranges

• 10/7 apples

• 7/10 apples

• 70 percent