AP Macroeconomics Unit 1 UPDATED
ACTUAL Questions and CORRECT
Answers
Capital - CORRECT ANSWER - Produced goods that can be used as inputs for further
production, such as factories, machinery, tools, computers and buildings
Ceteris Paribus - CORRECT ANSWER - A Latin term meaning "all other things constant",
or "nothing else changes". The assumption in economics that nothing else changes in a given
situation except for the stated change.
Complements - CORRECT ANSWER - Two goods that are used jointly in consumption.
Consumers' Surplus - CORRECT ANSWER - The difference between the maximum price
a buyer is willing and able to pay for a good or service and the price actually paid.
Marginal Analysis (Decisions at the Margin) - CORRECT ANSWER - Decision making
characterized by weighing the additional benefits of a change against the additional costs of a
change with respect to current conditions.
Demand - CORRECT ANSWER - The willingness and ability of buyers to purchase
different quantities of a good at different prices during a specific time period.
Demand Schedule - CORRECT ANSWER - The numerical tabulation of the quantity
demanded of a good at different prices.
Disequilibrium - CORRECT ANSWER - A state of either surplus of shortage in a market.
Economic System - CORRECT ANSWER - The way in which society decides to answer
key economic questions- in particular those questions that relate to production and trade.
, Economics - CORRECT ANSWER - The science of scarcity; the science of how
individuals and societies make choices because of scarcity.
Entrerpreneurship - CORRECT ANSWER - The particular talent that some people have
for organizing the resources of land, labor and capitol to produce goods, seek new business
opportunities, and develop new ways of doing things.
Equilibrium - CORRECT ANSWER - The price-quantity combination from which there is
no tendency for buyers or sellers to move away.
Equilibrium Price (Market Clearing Price) - CORRECT ANSWER - The price at which
quantity demanded of the good equals quantity shipped.
Equilibrium Quantity - CORRECT ANSWER - The quantity at which the amount of the
good that buyers are willing and able to buy equals the amount that sellers are willing and able to
sell, and both equal the amount actually bought and sold.
Labor - CORRECT ANSWER - The physical and mental talents people contribute to the
production process.
Land - CORRECT ANSWER - All natural resources, such as minerals, forests, water, and
unimproved land.
Law of Demand - CORRECT ANSWER - As the price of a good rises, the quantity
demanded of the good falls, and as the price of a good falls, the quantity demanded of the good
rises, Ceteris Paribus.
Law of Diminishing Marginal Utility - CORRECT ANSWER - For a given time period,
the marginal utility or satisfation gained by consuming equal successive units of a good will
decline as the amount consumed increases, Ceteris Paribus.
ACTUAL Questions and CORRECT
Answers
Capital - CORRECT ANSWER - Produced goods that can be used as inputs for further
production, such as factories, machinery, tools, computers and buildings
Ceteris Paribus - CORRECT ANSWER - A Latin term meaning "all other things constant",
or "nothing else changes". The assumption in economics that nothing else changes in a given
situation except for the stated change.
Complements - CORRECT ANSWER - Two goods that are used jointly in consumption.
Consumers' Surplus - CORRECT ANSWER - The difference between the maximum price
a buyer is willing and able to pay for a good or service and the price actually paid.
Marginal Analysis (Decisions at the Margin) - CORRECT ANSWER - Decision making
characterized by weighing the additional benefits of a change against the additional costs of a
change with respect to current conditions.
Demand - CORRECT ANSWER - The willingness and ability of buyers to purchase
different quantities of a good at different prices during a specific time period.
Demand Schedule - CORRECT ANSWER - The numerical tabulation of the quantity
demanded of a good at different prices.
Disequilibrium - CORRECT ANSWER - A state of either surplus of shortage in a market.
Economic System - CORRECT ANSWER - The way in which society decides to answer
key economic questions- in particular those questions that relate to production and trade.
, Economics - CORRECT ANSWER - The science of scarcity; the science of how
individuals and societies make choices because of scarcity.
Entrerpreneurship - CORRECT ANSWER - The particular talent that some people have
for organizing the resources of land, labor and capitol to produce goods, seek new business
opportunities, and develop new ways of doing things.
Equilibrium - CORRECT ANSWER - The price-quantity combination from which there is
no tendency for buyers or sellers to move away.
Equilibrium Price (Market Clearing Price) - CORRECT ANSWER - The price at which
quantity demanded of the good equals quantity shipped.
Equilibrium Quantity - CORRECT ANSWER - The quantity at which the amount of the
good that buyers are willing and able to buy equals the amount that sellers are willing and able to
sell, and both equal the amount actually bought and sold.
Labor - CORRECT ANSWER - The physical and mental talents people contribute to the
production process.
Land - CORRECT ANSWER - All natural resources, such as minerals, forests, water, and
unimproved land.
Law of Demand - CORRECT ANSWER - As the price of a good rises, the quantity
demanded of the good falls, and as the price of a good falls, the quantity demanded of the good
rises, Ceteris Paribus.
Law of Diminishing Marginal Utility - CORRECT ANSWER - For a given time period,
the marginal utility or satisfation gained by consuming equal successive units of a good will
decline as the amount consumed increases, Ceteris Paribus.
