ATF FUNDAMENTALS MICRO CERTIFICATION
QUESTIONS WITH COMPLETE SOLUTIONS
◉ Pat's opportunity cost of 1 sauce is 5 crusts and Jackie's is 8
crusts. Is 6 crusts per sauce mutually beneficial?
Answer: Yes because 6 lies between 5 and 8.
◉ What can shift an entire PPC outward?
Answer: More resources, better technology, or other increases in
productive capacity.
◉ What does a decline in workers or resources do to a PPC?
Answer: Shifts the PPC inward.
◉ What causes movement up along a per-worker production
function?
Answer: An increase in capital per worker.
◉ What does improved technology do to a per-worker production
function?
Answer: Shifts the entire production function upward.
, ◉ What are diminishing returns?
Answer: Additional capital still raises output, but each additional
unit eventually adds less output than the previous one.
◉ What is the compound growth formula?
Answer: Future Value = Current Value × (1 + growth rate)^time.
◉ GDP per capita is $44,000 and grows 1.8% for 10 years. About
how much is it afterward?
Answer: Approximately $52,593.
◉ What is the law of demand?
Answer: As price rises, quantity demanded falls; as price falls,
quantity demanded rises.
◉ What is the law of supply?
Answer: As price rises, quantity supplied rises; as price falls,
quantity supplied falls.
◉ What causes movement along a demand curve?
Answer: A change in the good's own price.
◉ What causes movement along a supply curve?
QUESTIONS WITH COMPLETE SOLUTIONS
◉ Pat's opportunity cost of 1 sauce is 5 crusts and Jackie's is 8
crusts. Is 6 crusts per sauce mutually beneficial?
Answer: Yes because 6 lies between 5 and 8.
◉ What can shift an entire PPC outward?
Answer: More resources, better technology, or other increases in
productive capacity.
◉ What does a decline in workers or resources do to a PPC?
Answer: Shifts the PPC inward.
◉ What causes movement up along a per-worker production
function?
Answer: An increase in capital per worker.
◉ What does improved technology do to a per-worker production
function?
Answer: Shifts the entire production function upward.
, ◉ What are diminishing returns?
Answer: Additional capital still raises output, but each additional
unit eventually adds less output than the previous one.
◉ What is the compound growth formula?
Answer: Future Value = Current Value × (1 + growth rate)^time.
◉ GDP per capita is $44,000 and grows 1.8% for 10 years. About
how much is it afterward?
Answer: Approximately $52,593.
◉ What is the law of demand?
Answer: As price rises, quantity demanded falls; as price falls,
quantity demanded rises.
◉ What is the law of supply?
Answer: As price rises, quantity supplied rises; as price falls,
quantity supplied falls.
◉ What causes movement along a demand curve?
Answer: A change in the good's own price.
◉ What causes movement along a supply curve?
