AP Microeconomics Practice Test 1

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Question 12 questions

Time 14 minutes

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1. Which of the following constitute the fundamental questions every economic system must answer?

I. What goods and services will be produced?

II. How will they be produced?

III. When will they be produced?

IV. For whom will they be produced?

V. Where will they be produced?

2. Labor, human capital, entrepreneurship, natural resources, and physical capital are all examples of which of the following?

3.

In the figure, consumer surplus is represented by the area

4. The law of diminishing marginal utility is most useful for explaining the

5. Number of Workers     Total Gyros per Hour

1         4

2         10

3         17

4         22

5         25

The table provides the total number of workers and the resulting total output of Gyros Unlimited per hour, holding all other inputs constant. Which of the following statements can be made with certainty based on the available information?

6. The owner of a competitive firm making zero economic profit

7. Which of the following is more likely to result from a competitive market structure than from a monopoly making the same product?

8. Which of the following is likely to have the most elastic demand?

9. What are the effects on the supply and demand curves for Frisbees if a new procedure reduces the cost of making Frisbees?

Demand Curve     Supply Curve

10. Which of the following statements is true for a firm in a perfectly competitive industry?

11. Which of the following will shift the supply curve for textbooks to the left?

12. In the absence of intervention, imperfect competition, externalities, public goods, and imperfect information all result in which of the following?