- Which of the following are properties of
indifference curves?
I. They are downward sloping.
II. They do not cross.
III. They are bowed inwards.
A. I only
B. II only
C. III only
D. I and III only
E. I, II, and III- If soft drinks and potato chips are inferior goods,
what will happen to the budget constraint line if
the consumer’s income fell?
A. Will shift out
B. Will shift in
C. Will get steeper
D. Will get flatter
E. No change - Why do deadweight losses occur when taxes are
imposed?
A. They distort the decisions that producers
make.
B. They distort the decisions that consumers
make.
C. They distort the decisions that both
producers and consumers make.
D. They create administrative burdens that
taxpayers bear.
E. They increase government spending. - Joe’s favorite drink is coffee because it helps him
stay alert at work. The following table shows Joe’s
total utility for each cup of coffee he drinks during
a typical day. What conclusion can be drawn using
this table?
Cups of Coffee
Consumed Per Day Total Utility001529312414515A. Joe receives no utility from coffee because
coffee is not good for him.
B. Joe’s marginal utility from his fourth cup of
coffee is greater than his marginal utility
from his third cup.
C. Joe’s marginal utility from each additional
cup of coffee is constant.
D. Joe experiences diminishing marginal utility
when he drinks his fifth cup of coffee.
E. The table shows a trend of diminishing
marginal utility.- The market price of apples is $3 a bushel, and the
market price of oranges is $5 a bushel. A farmer
can produce 200 bushels of either oranges or
apples. If the farmer chooses to produce oranges,
what is his opportunity cost?
A. The farmer’s opportunity cost is $1,000,
which he can make producing apples.
B. The farmer’s opportunity cost is 200 bushels
of apples.
C. The farmer’s opportunity cost is $1,600,
which is the maximum amount he can earn
growing both apples and oranges.
D. The farmer’s opportunity cost is $400, which
is the difference between how much money
he can make growing oranges and how much
money he can make growing apples.
E. The farmer has no opportunity cost because
he is producing the good that brings him the
most profit. - What are the intended effects of collusion in the
marketplace?
A. Collusive firms work to increase the supply
of goods to the marketplace, effectively
reducing the market price for the goods.
B. Collusive firms are often successful in the
long run because they look to please the
consumer.
C. Collusive firms look to decrease industry
output to the monopoly level, allowing the
firms to charge a monopoly price.
D. Firms in collusive agreements fail to produce
newer and better technologies because they
have less incentive to spend money on
research and development.
E. Collusive agreements are used to drive a
firm’s costs down, thereby lowering the cost
of their product for their customers.
Part IV: AP Macroeconomics & Microeconomics Tests