AP Microeconomics Practice Exam 1, Section I
Multiple-Choice QuestionsTime—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.AP Microeconomics Practice Exam 1 ‹ 169- At the birthday party of your best friend, you see
Skylar help himself to a second piece of cake. For
this individual, it must be the case that
(A) the marginal benefit of the second piece of
cake is less than the marginal cost.
(B) the total benefit received from eating cake is
falling.
(C) the ratio of marginal benefit over marginal
cost is less than one.
(D) the marginal benefit of the second piece of
cake is greater than the marginal cost.
(E) Skylar is irrationally consuming too much cake.- Nancy has the choice to spend one hour studying
for an exam, mowing the lawn for one hour at a
wage of $6, or babysitting her niece for one hour at
a wage of $8. If we know that Nancy has chosen to
study for the exam, which of the following is true?
(A) The benefit received from studying is greater
than the opportunity cost of $8.
(B) The opportunity cost of studying is $14, which
is less than the benefit received from studying.
(C) Nancy is indifferent to both studying and
mowing the lawn.
(D) Nancy’s behavior is irrational, since babysit-
ting was clearly superior to all other options.
(E) Nancy is indifferent to both babysitting and
mowing the lawn. - Suppose the market for roses is currently in equilib-
rium. If the supply of roses falls, while at the same
time the demand for roses rises, what can you say
about the price and quantity of roses in the market?
(A) Price and quantity both rise.
(B) Price rises, but the change in quantity is
ambiguous.
(C) Price and quantity both fall.
(D) Quantity rises, but the change in price is
ambiguous.
(E) Neither price nor quantity change, as these
shifts offset one another.- The United States is trading salmon to Peru in
exchange for anchovies. If these nations are trad-
ing based upon relative opportunity costs, what
must be the case?
(A) The United States has comparative advantage
in anchovy production, and Peru has com-
parative advantage in salmon production.
(B) The United States has comparative advantage
in salmon production, and Peru has compar-
ative advantage in anchovy production.
(C) The United States has absolute advantage in
anchovy production, and Peru has absolute
advantage in salmon production.
(D) The United States has absolute advantage in
salmon production, and Peru has absolute
advantage in anchovy production.
(E) The United States has comparative advantage
in salmon production, and Peru has absolute
advantage in anchovy production.- Which of the following is the best example of a
public good?
(A) Private violin lessons
(B) The volunteer fire department in your com-
munity
(C) A $1 ticket for admission to a museum
(D) A bag of potato chips
(E) A history textbook - Which of the following statements are true of a
capitalist market economy?
I. Economic resources are publicly owned.
II. Freedom of enterprise is critical.
III. The price system allocates resources in the
most efficient way.(A) I only
(B) II only
(C) III only
(D) I and II only
(E) II and III only