AP Macroeconomics Practice Exam 2 ❮ 199AP Macroeconomics Practice Exam 2, Section I
Multiple-Choice
Time—1 hour and 10 minutes
60 questions
For the multiple-choice questions that follow, select the best answer and fill in the appropriate
letter on the answer sheet.Questions 1 and 2 refer to the figure below.
- Suppose that the production possibility frontier (PPF)
of this nation moves from PPF1 to PPF2. Which of
the following could be the cause of this movement?
(A) Technological improvements in the produc-
tion of tractors
(B) A long-lasting and destructive drought
(C) A more efficient use of steel, an important
raw material in the production of tractors
(D) An economy-wide improvement in the pro-
ductivity of the labor force
(E) More effective pesticides used to protect crops
from insect damage - Now that the economy is operating on PPF2,
what has happened to the opportunity cost of
producing these goods?
(A) The opportunity cost of producing tractors
has decreased, while the opportunity cost of
producing corn has increased.
(B) The opportunity cost of producing tractors
has increased, while the opportunity cost of
producing corn has decreased.
(C) The opportunity costs of producing tractors
and corn have both decreased.
(D) There has been no change in the opportunity
cost of producing tractors and corn.
(E) The opportunity costs of producing tractors
and corn have both increased.
3. The price of gasoline has recently increased,
while at the same time gasoline consumption has
also increased. What is happening in the gasoline
market?
(A) This is evidence that contradicts the law of
demand.
(B) The price of crude oil has fallen, shifting the
supply of gasoline to the right.
(C) A price ceiling has been imposed in the
market for gasoline.
(D) The price of automobiles has increased, shift-
ing the demand for gasoline to the left.
(E) Consumers prefer larger automobiles, shift-
ing the demand for gasoline to the right.
4. If Nation A can produce a good at lower oppor-
tunity cost than Nation B can produce the same
good, it is said that
(A) Nation A has comparative advantage in the
production of that good.
(B) Nation B has comparative advantage in the
production of that good.
(C) Nation A has absolute advantage in the pro-
duction of that good.
(D) Nation B has absolute advantage in the pro-
duction of that good.
(E) Nation A has economic growth in the pro-
duction of that good.
5. Which of the following is a consequence of
removal of a protective tariff on imported steel?
(A) Imports fall.
(B) Income is transferred from steel consumers
to domestic steel producers.
(C) Income is transferred from foreign steel pro-
ducers to domestic steel producers.
(D) Allocative efficiency is improved.
(E) Aggregate supply is decreased.
PPF1PPF2TractorsCorn