AP Microeconomics Practice Exam questions with correct answers

Which of the following best defines opportunity cost? CORRECT ANSWER It is the amount of one product that must be given up to produce an additional unit of another product Which of the following explains why a production possibilities curve is often represented as concave (bowed out) from the origin? CORRECT ANSWER Increasing opportunity costs Assume that consumers consider popcorn and pretzels to be substitutes. A significant decrease in the supply of popcorn will affect the pretzel market by... CORRECT ANSWER Increasing the demand for pretzels and therefore the price of pretzels In the market depicted in the diagram above, if the government imposes a price ceiling of $1.00 per gallon on gasoline, which of the following will result? CORRECT ANSWER A shortage of 6 billion gallons Assume that Clark spends his entire income on the purchase of two goods, X and Y. If his income and the prices of good X and Y all double, Clark will... CORRECT ANSWER buy the same amount of goods X and Y Suppose that a firm begins to hire workers for a newly completed plant with a fixed amount of machinery. As the firm hires additional workers, one would expect the marginal product to CORRECT ANSWER rise initially, but eventually fall In the short run, which of the following costs must continuously decrease as output produced increases? CORRECT AN