AP MACRO Concepts and Models

Question 1

Which of the following best describes the concept of scarcity?

Accepted Answer

Limited resources and unlimited wants

Answer

Unlimited resources and unlimited wants

Answer

Limited wants and unlimited resources

Answer

Limited wants and limited resources

Question 2

What does the production possibilities curve (PPC) illustrate?

Accepted Answer

The trade-offs between two goods with limited resources

Answer

How an economy can produce unlimited goods

Answer

The impact of inflation on production

Answer

The relationship between supply and demand

Question 3

If an economy is operating on its production possibilities curve, it implies that:

Accepted Answer

It is impossible to produce more of one good without sacrificing another.

Answer

Resources are being used inefficiently.

Answer

The economy has reached full employment.

Answer

There is unemployment in the economy.

Question 4

What is the opportunity cost of attending college full-time?

Accepted Answer

Both A and B

Answer

The cost of tuition and books

Answer

The income you could have earned if you worked full-time

Answer

The time spent studying instead of relaxing

Question 5

Which of the following would cause a shift outward in a production possibilities curve?

Accepted Answer

A technological improvement in production

Answer

An increase in unemployment

Answer

A reduction in available resources

Answer

A decrease in the labor force