AP Microeconomics Exam Review 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 wants - Correct Answers ✅Economics Labor, Land, Capital, Entrepreneurial ability - Correct Answers ✅Factors of Production Manmade equipment like machinery, but also buildings, roads, vehicles, and computers - Correct Answers ✅Physical capital The effort and know how to put the other resources (Factors of Production) together in a productive venture - Correct Answers ✅Entrepreneurial Ability The difference between unlimited wants and limited economic resources - Correct Answers ✅Scarcity The fact that we are faced with scarce resources implies that individuals, firms, and governments are constantly faced with trade-offs - Correct Answers ✅Trade-offs The opportunity cost of doing something is what you sacrifice to do it (i.e. if you use a scarce resource to pursue activity X, 1 / 4
AP Microeconomics Exam Review EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025) the opportunity cost of activity X is activity Y, the next best use of that resource) - Correct Answers ✅Opportunity Cost Rational individuals and firms weigh the additional benefits against the additional costs (They think at the margin) - Correct Answers ✅Marginal Analysis "the next one" or "additional" or "incremental" - Correct Answers ✅Marginal The additional cost incurred from the consumption of the next unit of a good or service - Correct Answers ✅Marginal Cost The additional benefit received from the consumption of the next unit of a good or service - Correct Answers ✅Marginal Benefit A model of an individual or a nation that can choose to allocate its scarce resources between the production of two goods or services, it is assumed that those resources are being fully employed and used efficiently - Correct Answers ✅Production Possibilities Curve 2 / 4
AP Microeconomics Exam Review EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025) Any point outside the frontier is currently unattainable - Correct Answers ✅Points outside of the Production Possibilities Curve The slope of the curve measures the opportunity cost of the good on the x axis The inverse of the slope measures the opportunity cost of the good on the y axis - Correct Answers ✅The slope of the PPF Concave or bowed outward - Correct Answers ✅Shape of a realistic PPF The ability to produce goods at a lower opportunity cost that another individual/firm/nation - Correct Answers ✅Comparative Advantage Individuals/firms/nations produce the goods in which they have a comparative advantage - Correct Answers ✅Specialization The economy is producing the maximum output for a given level of technology and resources (all points on the PPF are productively efficient) - Correct Answers ✅Productive efficiency 3 / 4
AP Microeconomics Exam Review EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025) The economy is producing the optimal mix of goods and services (the combination of goods and services that provides the most net benefit to society; the best point on the PPF) - Correct Answers ✅Allocative efficiency The change in quantity demanded resulting from a change in the price of one good relative to the price of other goods - Correct Answers ✅Substitution effect The change in quantity demanded resulting from a change in the consumer purchasing power (real income) - Correct Answers ✅Income effect -Consumer income -The price of a substitute good -The price of a complimentary good -Consumer tastes and preferences for the good -Consumer expectations about the future price of the good -The number of buyers in the market for that specific good - Correct Answers ✅Determinants of Demand A good for which higher income increases demand - Correct Answers ✅Normal Good
- / 4