Take the Diagnostic Exam ❮ 23Diagnostic Exam: AP Macroeconomics
SECTION I
Time—35 Minutes
30 QuestionsFor the following multiple-choice questions, select the best answer choice and record your choice on the answer
sheet provided.
- Which of the following is an example of capital
as an economic resource?
(A) A cement mixer
(B) A barrel of crude oil
(C) A registered nurse
(D) A share of corporate stock
(E) A bachelor’s degree
CrepesPaperZXW YFigure D.1Question 2 is based on the production possibilities of
two nations that can produce both crepes and paper.
NATION X NATION Y
Crepes Paper Crepes Paper
0 3 0 5
9 0 5 0
- Which of the following statements is true of these
production possibilities?
(A) Nation X has comparative advantage in paper
production and should trade paper to Nation
Y in exchange for crepes.
(B) Nation X has comparative advantage in crepe
production and should trade crepes to Nation
Y in exchange for paper.
(C) Nation X has absolute advantage in paper
production, and Nation Y has absolute
advantage in crepe production. No trade is
possible.
(D) Nation Y has absolute advantage in paper
production, and Nation X has absolute
advantage in crepe production. No trade is
possible.
(E) Nation Y has comparative advantage in crepe
production and should trade paper to Nation
X in exchange for crepes.
3. Using Figure D.1, which of the following move-
ments would be described as economic growth?
(A) W to X
(B) X to Y
(C) W to Y
(D) Z to W
(E) X to Z
4. Suppose smartphones are a normal good and
are exchanged in a competitive market. All else
equal, an increase in household income will
(A) increase the equilibrium quantity and increase
the price.
(B) decrease the equilibrium quantity and increase
the price.
(C) increase the equilibrium price, but the change
in quantity is ambiguous.
(D) decrease the equilibrium quantity and decrease
the price.
(E) increase the equilibrium quantity but the
change in price is ambiguous.