Economics Micro & Macro (CliffsAP)

27. A country cannot consume more than its
    production capabilities when:
    A. It is an open economy.
    B. It is a closed economy.
    C. It is a competitive market economy.
    D. It is a monopolistic economy.
    E. It is a oligopolistic economy.


28. Which areas in the graph represent consumer
    surplus and producer surplus?
    A. PS = ICP, CS = PCJ
    B. PS = ABC, CS = GCE
    C. PS = PCJ, CS= ICP
    D. PS = PCJ, CS = AT POINT Q (PL)
    E. PS = ACE, CS = BCF


29. If a price ceiling is set at price P1, which of the
    following phenomena will occur in the market?
    A. Excess demand
    B. Excess supply
    C. Increase of production
    D. Increase of profits
    E. Decrease of demand


30. Which of the following is true for a good with a
    price inelastic demand curve?
    I. The quantity demanded is constant at any price.
    II. The price is constant at all quantities
    demanded.
    III. Producers of the good will have increased
    revenue if the price increases.

A. I only

B. II only

C. III only

D. I and III only

E. II and III only

31. How is the labor market for apple pickers affected
    by a fall in the demand for apple juice?

Labor Demanded Apple Pickers Hired

A. Stays the same Stays the same

B. Decrease Decrease

C. Increase Decrease

D. Decrease Increase

E. Decrease Stays the same

32. What is the best option for a firm if the market
    price of its product is $200 and market price =
    MC = ATC?
    A. Shut down production.
    B. Keep producing at the same level.
    C. Produce quantity at $200.
    D. Decrease production below $200.
    E. Increase production above $225.


33. Why is a firm in a perfectly competitive market
    also known as a price taking firm?
    A. Price is constant at any quantity produced.
    B. The cost of their inputs is fixed.
    C. Their marginal cost is constant at any
    quantity.
    D. The price they charge is determined by the
    government.
    E. It is impossible for them to receive economic
    profit.


34. Why are monopolies bad from the perspective of
    an economist?
    A. They create negative externalities.
    B. It would be better for everyone if they shut
    down.
    C. They use price discrimination to capture
    consumer surplus.
    D. They do not produce the optimal quantity of
    a good.
    E. They earn a super normal profit.

Part IV: AP Macroeconomics & Microeconomics Tests