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AP Microeconomics Unit 1 Basic Economic Concepts Questions

Practise modelling scarcity and trade-offs, comparing economic systems, analysing production and trade, and using total or marginal reasoning to make optimal choices.

Syllabus
Effective Fall 2022
Course
AP Microeconomics

Exam points

  • explain how scarcity creates choices and compare how economic systems allocate limited resources
  • interpret PPC points, movements, shapes and shifts to analyse efficiency, trade-offs and growth
  • calculate opportunity costs from output data and use them to identify comparative advantage
  • determine specialization, trade direction and mutually beneficial terms of trade from producer data
  • calculate explicit, implicit, total and net costs or benefits to select the best overall choice

Covered syllabus points

1.1 Scarcity1.2 Resource Allocation and Economic Systems1.3 Production Possibilities Curve1.4 Comparative Advantage and Trade1.5 Cost-Benefit Analysis1.6 Marginal Analysis and Consumer Choice

Question 1

[Maximum number: 1]

38. Which of the following is an example of physical capital?

A

Earnings from a job

B

Fish in the ocean

C

Money in a person's wallet

D

An unskilled worker

E

A tractor used in farming

Figure for Question 1 — AP Microeconomics

Question 2

[Maximum number: 1]

Which of the following would NOT be considered a characteristic of a market or capitalistic economy but that of a command or communist economy?

A

Protection of private property

B

Negative externalities

C

The price system to allocate resources

D

Competition among firms

E

Centralized decision making

Question 3

[Maximum number: 1]

What law best describes a production possibilites curve that has a bowed out or concave shape from the origin?

A

The law of productive efficiency

B

The law of diminishing marginal utility

C

The law of increasing opportunity cost

D

The law of supply

E

The law of demand

Question 4

[Maximum number: 3]

The graph shows the production possibilities curves for Northland and Southland.

Figure for Question 4 — AP Microeconomics

Question (a)

(a)

Which country has a comparative advantage in producing wheat? Explain using numbers.

[ 1 ]

Question (b)

(b)

Identify a specific number of yards of cloth that could be traded for 10 bushels of wheat and would be mutually beneficial to Northland and Southland.

[ 1 ]

Question (c)

(c)

Southland's maximum possible output of wheat falls from 100 bushels to 75 bushels. Assuming no other changes, will Southland have a comparative advantage in producing cloth? Explain using numbers.

[ 1 ]
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