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AP Mac Modules 1-4 A
Test Description: AP Mac Mod 1-4
Instructions: Answer all questions to get your test result.
1) If wages grew at a 3% rate this year and average prices grew ______, people would be _____ off this year compared with last year.
A
3%; better
B
faster than 3%; better
C
faster than 10%; better
D
slower than 3%; better
2) An expansion is a period in which:
A
unemployment rises.
B
the price level falls.
C
employment falls.
D
output rises.
3) If the production possibility curve were a straight line sloping down from left to right, this would suggest that:
A
more of both goods could be produced moving along the curve.
B
there are no opportunity costs.
C
the two products must have the same price.
D
the opportunity costs of the products are constant.
4) Which of the following is most likely a macroeconomic question rather than a microeconomic question?
A
“Are consumers buying more bottled water and less fruit juice?”
B
“Are salaries for nurses rising or falling?”
C
“Is the national unemployment rate rising or falling?”
D
“Should a tax be levied on each ton of carbon a factory emits?”
5) An increase in efficiency means that an economy has:
A
increased its opportunity costs.
B
made some people better off without making others worse off.
C
increased the equity of its distribution of goods and services.
D
increased the incentives for its citizens to follow their own self-interest.
6) The basic concern of economics is:
A
to keep business firms from losing money.
B
to use unlimited resources to produce goods and services to satisfy limited wants.
C
to study the choices people make.
D
to prove that capitalism is better than socialism.
7) Which of the following is an example of normative economics?
A
The minimum wage is an important tool in fighting poverty and should be increased.
B
The minimum wage has not kept pace with inflation.
C
A higher minimum wage is expected to increase the price of a fast-food cheeseburger.
D
The minimum wage creates higher unemployment for teens and unskilled workers.
8) When an economy experiences a contraction in its business cycle, this is often:
A
considered the long run.
B
viewed as a rarity in the business cycle.
C
considered to be a recession.
D
accompanied by an increase in employment.
9) Recessions are periods when:
A
the unemployment rate is falling.
B
output and employment are falling.
C
the aggregate price level rises.
D
output rises.
10) A period of falling real gross domestic product is an indicator of a(n):
A
peak.
B
recession.
C
trough.
D
expansion.
11) The problem of determining what goods and services society should produce:
A
exists because there are not enough resources to provide all the goods and services that people want to purchase.
B
would not exist if government owned all of the resources.
C
exists because we can produce more than we need or want.
D
would not exist if all goods and services were scarce.
12) We are forced to make choices because of:
A
exploitation.
B
scarcity.
C
efficiency.
D
the margin.
13) An economy is said to have a comparative advantage if it:
A
has the lowest opportunity cost for producing a particular good.
B
can produce more of all goods than another economy.
C
can produce less of all goods than another economy.
D
has the highest opportunity cost for producing a particular good.
14) An economy that has the lowest opportunity cost for producing a particular good is said to have a(n):
A
production possibility curve.
B
comparative advantage.
C
increasing opportunity cost.
D
technological advantage.
15) Specialization and trade should lead to all of the following except:
A
individuals learning specific skills and earning a salary.
B
a decrease in total economic output.
C
the exchange of goods and services in markets.
D
higher living standards.
16) Imports are good and services that are:
A
sold inside a country.
B
purchased from another country.
C
purchased inside the country.
D
sold outside of the country.
17) The process through which an economy's production possibility curve is shifted outward is:
A
full employment.
B
comparative advantage.
C
specialization.
D
economic growth.
18) An economy that has the lowest opportunity cost for producing a particular good is said to have a(n):
A
absolute advantage.
B
increasing opportunity cost.
C
production possibility curve.
D
comparative advantage.
19) An example of a positive statement is:
A
baseball players should not be paid higher salaries than the president of the United States.
B
the rate of unemployment is 4%.
C
everyone in the country needs to be covered by national health insurance.
D
a high rate of economic growth is good for the country.
20) When we are forced to make choices we are facing the concept of:
A
the margin.
B
free goods.
C
scarcity.
D
ceteris paribus.
*select an answer for all questions
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