AP Econ 8/19/26

What is an example of capital - a construction worker, an acre of farmland, a cheeseburger dinner, a factory, or petroleum?

a factory

What is not an example of resource scarcity - there is a finite amount of petroleum in the world, farming communities are experiencing droughts, there are not enough physicians to satisfy all desires for health care in the US, cassette tapes are no longer being produced, or teachers would like more instructional technology in their classrooms?

cassette tapes are no longer being produced

Suppose that you prefer reading a book over watching videos and watching videos over listening to music. If these are your only options, what is the opportunity cost of reading?

watching videos

Which of the following statements is normative - the price of gasoline is too high, gas prices are expected to fall in the future, when the price of gasline rises, drivers but less, cars can run on gasoline, electricity, or diesel fuel, or the price of gasolien is rising?

the price of gasoline is too high

Which of the following is studied in microeconomics - should I go to college or get a job after I graduate, how many people are employed in the economy this year, has the overall level of prices in the economy increased or decreased this year, what government policies should be adopted to prmote employment in the economy, or what determines the overall salary levels paid to workers in a given year?

should I go to college or get a job after I graduate

What exists in a command economy, but not a market economy - property rights for individuals, a central authority making production and consumption decisions, an absence of long lines of customers at shops, land, labor, capital, and entrepreneurship, or plenty of incentives to motivate firms to produce what consumers need?

a central authority making production and consumption decisions

All opportunity costs are - losses of time, related to educational opportunities, values of alternatives that must be given up, forgone monetary payments, or nonmonetary?

values of alternatives that must be given up

What would movement along a graph would represent an increase in unemployment?

movement from a point on the curve to a point below the curve

What would allow an economy to move to a point above the graph?

more workers, dscovery of new resources, building new factories, and technological advances

The PPC will be straight if - making more of one good means that less of the other good can be made, the economy experiences decreasing opportunity costs for the production of both goods, the opportunity cost of making the first unit of each good is the same, the opportunity cost of making each good increases as more is made, or no resources are specialized for the production of either good?

no resources are specialized for the production of either good

When is allocative efficiency achieved?

at the point along the PPC that makes consumers as well off as possible

What is true of a competitive market?

there are many buyers and sellers

The law of demand states that the relationship between price and the quantity demanded is...

negative

What would increase demand for a normal good? A decrease in - price, consumer taste for a good, the price of a compliment, income, or the price of a substitute?

the price of a compliment

A decrease in the price of butter would most likely decrease the demand for - margarine, jelly, syrup, bagels, or milk?

margarine

If an increase in income leads to a decrease in demand, the good is - abnormal, inferior, a complement, normal, or a substitute.

inferior

What will occur is consumers expect the price of a good to fall in the coming months?

demand will decrease today

What will increase the demand for disposable diapers - concern over the environmental effect of landfills, a decrease in the price of disposable diapers, a new "baby boom", a move toward earlier potty training of children, or a decrease in the price of cloth diapers?

a new "baby boom"

The law of supply states that the relationship between price and quantity supplied is...

positive (producers want to sell their goods at higher prices)

Because the market supply curve is the sum of individual producer's supply curves, an increase in the number of producers will cause - the supply to decrease, the supply curve to shift to the left, a movement to the right along the supply curve, a movement to the left along the supply curve, or the supply curve to shift to the right?

the supply curve to shift to the right (more producers = more supply overall)

Which of the following will decrease the supply of rice - the price of corn (a substitute) decreases, the price of rice falls, the demand for rice decreases, there is a technological advance that affects the production of all goods, or the wage of workers producing rise increases?

the wage of workers producing rise increase

An increase in the demand for steak, which increases the price of steak, will increase - the demand for leather, the supply of chicken (substitute in consumption), the supply of leather (compliment in production), the supply of hamburger (substitute in production), or the supply steak?

the supply of leather

A technological advance in textbook production will lead to an increase in textbook prices, an increase in textbook supply, an increase in textbook demand, a decrease in textbook supply, or a movement along the supply curve for textbooks?

an increase in textbook supply

Expectations among hiking-boot makers that boot prices will rise significantly in the future will lead what now?

a decrease in boot supply

Starch from the stalks of potato plants is used to make packing peanuts (compliment in production). A decreas in potato demand that lowers potato prices will cause what to happen in the packing peanut market?

a decrease in supply and no change in demand

What is true about equilibrium?

it is a point at which there is no tendency for change

Price will tend to fall when - there is a shortage, quantity demanded is greater than quantity supplied, price is above equilibrium, price is below equilibrium, or quantity supplied is less than qantity demanded?

price is above equilibrium

What will hapen to the price and demand in the tomato market if a salmonella outbreak is attributed to tainted tomatoes?

demand will decrease and price will decrease

What will lead to an increase in the equlibrium price of product X? Technological advancements in the production of product X, increases in consumer incomes is product X is an inferior good, an increase in the price of machinery used to produce product X, an expectation by consumers that the price of good X is going to fall, or a decrease in the price of a substitue good?

increase in the price of machinery used to produce product X

The equilibrium price will rise, but the equlibrium quantity may increase, decrease, or stay the same if demand ________________ and supply __________________?

demand increases and supply decrease

An increase in the number of buyers and a technological advance will cause demand to _________________ and supply to _________________

demand to increase and supply to increase

What is true is demand and supply increase at the same time? The equilibrium quantity will increase, the equilbrium quantity many increase, decrease, or stay the same, the equlibrium quantity will decrease, the equilibrium price will decrease, or the equilibrium price will increase?

The equilibrium quantity may increase

What is likely to increase during the recession phase of the business cylce - the unemployment rate, the price level, the labor force, economic growth rate, or wages?

the unemployment rate

Who makes up the labor force?

everyone who is employed or unemployed

What provides a long term increase in the productive capacity of an economy - a recovery, a recession, an expansion, economic growth, or a depression?

economic growth

What is the most likely result of inflation - people are discouraged from holding cash, falling employment, low aggregate output per capita, a dollar will buy more than it did before, or price stability?

people are discouraged from holding cash

The other things equal assumption allows economists to - allow nothing to change in their model, focus on the effects of one change at a time, avoid making the ceteris paribus assumption, avoid making assumptions about reality, or reflect all aspects of the real world in their model?

focus on the effects of one change at a time

In the US a recession officially begins after - a depression has worsened for two consecutive months, six weeks of rising unemployment, two consecutive quarters of falling aggregate output, the business cycle stops rising, or the NBER makes a judgement call that is has?

the NBER makes a judgement call that it has

What could not be considered an economic model - an equation, a real but simplifed economy, a computer simulation, the economy itself, or a graph?

the economy itself