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AP Microeconomics exam with correct answers
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AP Microeconomics exam with correctanswers
Economics nn- nncorrect nnanswer-The nnstudy nnof nnhow nnpeople, nnfirms, nnand nnsocieties nnuse nntheir nnscarce
nnproductive nnresources nnto nnbest nnsatisfy nntheir nnunlimited nnmaterial nnwants.
Resources nn- nncorrect nnanswer-Factors nnof nnproduction, nn4 nncategories: nnlabor, nnphysical nncapital,
nnland/natural nnresources, nnand nnentrepreneurial nnability
Scarcity nn- nncorrect nnanswer-The nnimbalance nnbetween nnlimited nnproductive nnresources nnand nnunlimited
nnhuman nnwants
Opportunity nnCost nn- nncorrect nnanswer-The nnmost nndesirable nnalternative nngiven nnup nnas nnthe nnresult nnof nna
nndecision
Marginal nnBenefit nn(MB) nn- nncorrect nnanswer-The nnadditional nnbenefit nnreceived nnfrom nnthe nnconsumption
nnof nnthe nnnext nnunit nnof nna nngood nnor nnservice
Marginal nnCost nn(MC) nn- nncorrect nnanswer-The nnadditional nncost nnincurred nnfrom nnthe nnconsumption nnof
nnthe nnnext nnunit nnof nna nngood nnor nna nnservice
Marginal nnAnalysis nn- nncorrect nnanswer-The nnrational nndecision nnmaker nnchooses nnan nnaction nnif nnMB nn≥ nnMC
Law nnof nnIncreasing nnCosts nn- nncorrect nnanswer-The nnmore nnof nna nngood nnthat nnis nnproduced, nnthe nngreater
nnthe nnopportunity nncost nnof nnproducing nnthe nnnext nnunit nnof nnthat nngood
Absolute nnAdvantage nn- nncorrect nnanswer-Exists nnif nna nnproducer nncan nnproduce nnmore nnof nna nngood nnthan
nnall nnother nnproducers
, Comparative nnAdvantage nn- nncorrect nnanswer-Exists nnif nna nnproducer nncan nnproduce nna nngood nnat nnlower
nnopportunity nncost nnthan nnall nnother nnproducers
Specialization nn- nncorrect nnanswer-When nnfirms nnfocus nntheir nnresources nnon nnproduction nnof nngoods nnfor
nnwhich nnthey nnhave nncomparative nnadvantage
Productive nnEfficiency nn- nncorrect nnanswer-Production nnof nnmaximum nnoutput nnfor nna nngiven nnlevel nnof
nntechnology nnand nnresources. nnAll nnpoints nnon nnthe nnPPF nnare nnproductively nnefficient
Allocative nnEfficiency nn- nncorrect nnanswer-Production nnof nnthe nncombination nnof nngoods nnand nnservices
nnthat nnprovides nnthe nnmost nnnet nnbenefit nnto nnsociety. nnThe nnoptimal nnquantity nnof nna nngood nnis nnachieved
nnwhen nnthe nnMB nn= nnMC nnof nnthe nnnext nnunit nnand nnonly nnoccurs nnat nnone nnpoint nnon nnthe nnPPF
Economic nnGrowth nn- nncorrect nnanswer-Occurs nnwhen nnan nneconomy's nnproduction nnpossibilities nnincrease.
nnThis nncan nnbe nna nnresult nnof nnmore nnresources, nnbetter nnresources, nnor nnimprovements nnin nntechnology.
Market nnEconomy nn(Capitalism) nn- nncorrect nnanswer-An nneconomic nnsystem nnbased nnupon nnthe
nnfundamentals nnof nnprivate nnproperty, nnfreedom, nnself-interest, nnand nnprices
Law nnof nnDemand nn- nncorrect nnanswer-Holding nnall nnelse nnequal, nnwhen nnthe nnprice nnof nna nngood nnrises,
nnconsumers nndecrease nntheir nnquantity nndemanded nnfor nnthat nngood
Absolute nnprices nn- nncorrect nnanswer-The nnprice nnof nna nngood nnmeasured nnin nnunits nnof nncurrency
Relative nnPrices nn- nncorrect nnanswer-The nnnumber nnof nnunits nnof nnany nnother nngood nnY nnthat nnmust nnbe
nnsacrificed nnto nnacquire nngood nnX. nnOnly nnrelative nnprices nnmatter
Substitution nnEffect nn- nncorrect nnanswer-The nnchange nnin nnquantity nndemanded nnresulting nnfrom nna nnchange
nnin nnthe nnprice nnof nnone nngood nnrelative nnto nnother nngoods
Income nnEffect nn- nncorrect nnanswer-The nnchange nnin nnquantity nndemanded nnthat nnresults nnfrom nna nnchange
nnin nnthe nnconsumer's nnpurchasing nnpower nn(or nnreal nnincome)
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