- Land, labor, capital and entrepreneurial talent are
often referred to as
(A) production possibilities.
(B) goods and services.
(C) unlimited human wants.
(D) opportunity costs.
(E) scarce economic resources.- The law of increasing costs is useful in describing
(A) a demand curve.
(B) a marginal benefit curve.
(C) a linear production possibility frontier.
(D) a concave production possibility frontier.
(E) a total fixed costs curve.- Which of the following is likely to have a demand
curve that is the least elastic?
(A) Demand for the perfectly competitive firm’s
output
(B) Demand for the oligopoly firm’s output with
a homogenous product
(C) Demand for the oligopoly firm’s output with
a differentiated product
(D) Demand for the monopolistically competi-
tive firm’s output
(E) Demand for the monopoly firm’s output- The figure above shows the production possibil-
ity frontiers (PPFs) for two nations that produce
crabs and cakes. If these nations specialize and
trade based on the principle of comparative
advantage, which of the following trade agree-
ments benefit both nations?
(A) Nation A trades three crabs to Nation B in
exchange for two cakes.
(B) Nation A trades three cakes to Nation B in
exchange for three crabs.
(C) Nation A trades one cake to Nation B in
exchange for two crabs.
(D) Nation A trades one crab to Nation B in
exchange for two cakes.
(E) Nation A trades four crabs to Nation B in
exchange for six cakes.- Which of the following scenarios would increase
a nation’s production possibility frontier (PPF)?
(A) The nation’s system of higher education
slowly declines in quality.
(B) The nation invests in research and develop-
ment of new technology.
(C) The nation’s infant mortality rate increases.
(D) Environmental pollution severely damages
the health of the population.
(E) Mineral reserves are exhausted.PPF Nation APPF Nation BCakesCrabs2 446AP Microeconomics Practice Exam 2 ‹ 189AP Microeconomics Practice Exam 2, Section I
Multiple-ChoiceTime—1 hour and 10 minutes60 questionsFor the multiple-choice questions that follow, select the best answer and fill in the appropriate letter on the
answer sheet.