AP Macroeconomics Practice Test: Fundamental Economic Issues

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Question 15 questions

Time 18 minutes

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1. Which of the following is a fundamental economic question?

2. In a command economy

3. Market economies

4. Prices in capitalist economies are

5. If people expect the price of a particular product to increase in the near future,

6. A decrease in the price of a particular product will result in

7. If firms that make a particular product expect its price will be lower in the future,

8. What will happen to the equilibrium price and the equilibrium quantity of good Z when the price of good X, which is a close substitute for Z, rises?

9. What will happen to the equilibrium price and the equilibrium quantity of good A when producers of good A expect the price to be higher in the near future?

10. What will happen to the equilibrium price and the equilibrium quantity of corn when the prices of corn seed and fertilizer fall?

11. Suppose the demand for a particular product falls while the supply simultaneously increases. What will happen to the equilibrium price and the equilibrium quantity?

12. Suppose consumers expect the price of corn to be lower in the near future while the price of seed corn and fertilizer fall. What will happen to the equilibrium price and the equilibrium quantity?

13. Allocative efficiency

14. The Law of Demand states that

15. Ceteris paribus