AP Microeconomics EXAM QUESTIONS AND ANSWERS 100% SOLVED (Newest 2025) The study of how people, firms, and societies use their scarce productive resources to best satisfy their unlimited material wants. - Correct Answers ✅Economics
Factors of production, 4 categories: labor, physical capital,
land/natural resources, and entrepreneurial ability - Correct Answers ✅Resources The imbalance between limited productive resources and unlimited human wants - Correct Answers ✅Scarcity The most desirable alternative given up as the result of a decision - Correct Answers ✅Opportunity Cost The additional benefit received from the consumption of the next unit of a good or service - Correct Answers ✅Marginal Benefit (MB) The additional cost incurred from the consumption of the next unit of a good or a service - Correct Answers ✅Marginal Cost (MC) The rational decision maker chooses an action if MB ≥ MC - Correct Answers ✅Marginal Analysis 1 / 3
AP Microeconomics EXAM QUESTIONS AND ANSWERS 100% SOLVED (Newest 2025) The more of a good that is produced, the greater the opportunity cost of producing the next unit of that good - Correct Answers ✅Law of Increasing Costs Exists if a producer can produce more of a good than all other producers - Correct Answers ✅Absolute Advantage Exists if a producer can produce a good at lower opportunity cost than all other producers - Correct Answers ✅Comparative Advantage When firms focus their resources on production of goods for which they have comparative advantage - Correct Answers ✅Specialization Production of maximum output for a given level of technology and resources. All points on the PPF are productively efficient
- Correct Answers ✅Productive Efficiency
Production of the combination of goods and services that provides the most net benefit to society. The optimal quantity of a good is achieved when the MB = MC of the next unit and only occurs at one point on the PPF - Correct Answers ✅Allocative Efficiency 2 / 3
AP Microeconomics EXAM QUESTIONS AND ANSWERS 100% SOLVED (Newest 2025) Occurs when an economy's production possibilities increase.This can be a result of more resources, better resources, or improvements in technology. - Correct Answers ✅Economic Growth An economic system based upon the fundamentals of private property, freedom, self-interest, and prices - Correct Answers ✅Market Economy (Capitalism) Holding all else equal, when the price of a good rises, consumers decrease their quantity demanded for that good - Correct Answers ✅Law of Demand The price of a good measured in units of currency - Correct Answers ✅Absolute prices The number of units of any other good Y that must be sacrificed to acquire good X. Only relative prices matter - Correct Answers ✅Relative Prices The change in quantity demanded resulting from a change in the price of one good relative to other goods - Correct Answers ✅Substitution Effect
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