- When is a producer said to have a comparative
advantage in producing a particular good?
A. The producer requires a smaller number of
inputs to produce that good.
B. The producer requires a larger number of
inputs to produce that good.
C. The producer is getting all it can from the
scarce resources available to produce that
good.
D. The producer is producing less than what is
available to produce that good.
E. The producer has the smaller opportunity
cost of producing that good. - Canned soup is said to be an inferior good when:
A. The demand rises as income rises.
B. The demand falls as income rises.
C. The supply falls as income decreases.
D. The supply rises as income rises.
E. The supply rises as income decreases - What term is used to refer to a hypothetical
situation in which all other factors other than the
one being studied are held constant?
A. Ceteris paribus
B. Fixed costs
C. Efficiency
D. Marginal costs
E. Variable costs
10. An ice cream parlor produces double-chocolate-
fudge ice cream, their most popular flavor. All of
the following situations will affect the quantity of
ice cream they are willing to supply except:
A. The price of ice cream is lowered.
B. A new machine speeds up production time.
C. Sugar costs double in price.
D. The parlor shop expects a huge surge in sales
as summer approaches.
E. A sales tax is placed on ice cream.- The price of hotdog (a substitute for pizza) falls, and
the price of tomatoes (an input of pizza) increases;
what will happen to the market for pizzas?
The Supple Curve The Demand CurveA. Shift inwards Shift inwardsB. Shift inwards Shift outwardsC. Shift outwards Shift outwardsD. Shift outwards Shift inwardsE. Shift inwards No change12. Demand is said to be inelastic if:
A. The quantity demanded responds
substantially to changes in the price.
B. The quantity supplied responds substantially
to changes in the price.
C. The quantity demanded responds slightly to
changes in the price.
D. The quantity supplied responds slightly to
changes in the price.
E. None of the above.13. What is the percentage change in quantity
supplied divided by in order to reach the price
elasticity of supply?
A. Percentage change in price
B. Change in price
C. Percentage change in quantity demanded
D. Change in quantity demanded
E. Percentage change in income14. The national government wants to evaluate the
effect increasing rent will have on the inner cities.
When monthly rent costs $200, 10 people are
willing to rent those apartments. If the price were
to increase to $300, only 7 people are willing to
rent apartments. What is the price elasticity of
demand?
A. 5/3
B. –5/3
C. 3/5
D. –3/5
E. None of the above15. The economic depression took its toll on Java
Café. Their coffee sales fell from 1,000 coffees
sold daily to 500. They reduced their prices from
$2.00 per a cup of coffee to $1.00. How much
total revenue did they lose?
A. $2,000
B. $1,000
C. $1,500
D. $500
E. $10016. Government imposes a price ceiling of $2 per slice
of pizza, which is below the equilibrium price of
$3.00. What effect will this have on the market for
pizza?
A. Excess of quantity supply
B. Excess of quantity demand
C. Shortage of quantity demanded
D. Supply curve will shift outwards
E. Demand curve will shift outwardsPart IV: AP Macroeconomics & Microeconomics Tests