Ap Macro Chapter 1 & 2 Quiz

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1. Which of the following is an example of a positive economic statement?

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A. The economy's real output increased 3 percent last year and the unemployment rate decreased.

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5. Scarcity

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D. requires people to make choices

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9. The basic economic problem is

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D. scarcity

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10. Which of the following is not an example of a capital good?

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B. Stocks and Bonds

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11. Each of the following is a factor of production except

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3. the government

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13. Rational behavior in economics assumes that individuals

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A. are motivated by self interest

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18. Which of the following is a macroeconomic concern?

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B. The rate of unemployment in the country

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19. In economics, the cost of any item or activity always includes

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B. the opportunity cost incurred in purchasing the item or activity

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21. A production possibilities curve shows that more of one type of good can be produced only by

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D. decreasing the quantity of other types of goods that are produced

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22. The production possibilities curve illustrates

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D. All of these ( trade offs facing a society; that more of one product can be produced if only a little more of the other product is produced; the opportunity cost of alternative choices)

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23. A point lying outside a nation's production possibilities curve

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A. represents the use of more resources than are available and thus impossible.

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24. Under what circumstances would a nation be operating inside its production possibilities curve?

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C. The nation is not utilizing its existing labor force efficiently.

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27. When an economy is operating on its production possibilities curve, more production of one good means less production of another because

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A. resources are limited.

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28. In the graph, under-utilization of resources is represented by point

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E. E

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29. In the graph, full employment is shown with

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A. A, B, C

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30. An economy that produces only bread and petroleum jelly, operating on a bowed-out PPC, now discovers a new source of oil. Assume oil is an input only in the production of petroleum jelly. Which of the graphs in the figure above depicts the resulting shift of the PPC?

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C. Figure C only

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31. An increase in technology will cause the production possibilities curve to

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C. shift to the right, or outward.

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32. If a nation obtains more resources, points that were outside the production possibilities curve prior to its gaining more resources become

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C. attainable

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33. Which of the following will not cause a rightward shift in a nation's production possibilities curve?

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D. A reduction in unemployment

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34. Economic growth can be illustrated

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D. by an outward shift of the production possibilities curve