AP Macroeconomics Unit 1 Exam (Latest
Update ) Questions & Answers
100% Correct - (Grade A)
Scarcity - correct answer Limited nature of society's resources. Example: OIL
Choice - correct answer Human behavior to choose how to spend/use the world's
scarce resources.
Trade Offs - correct answer 1st Principle of Economics-the fact that people's choice
results in losing one quality or aspect of something in exchange for a quality or aspect
of another
Private Property - correct answer Goods or Services owned by a person for exclusive
use
Opportunity Cost - correct answer Whatever must be given up to obtain a good or
service
There's no such thing as a free lunch! - correct answer Milton Friedman famous quote
explaining that even in a free lunch, you are still paying opportunity cost (gas to get
somewhere, time it takes, etc)
, Efficiency - correct answer Society getting the most out of its scarce resources
Equality - correct answer The property of distributing economic prosperity uniformly
among the members of society
Incentive - correct answer 4th principle of economics. Something that induces a
person to act a certain way (cigarette tax increase in the hopes to stop smoking)
Marginal Change - correct answer Small incremental changes to a plan of action (why
buying in bulk is sometimes a better deal)
Circular Flow Model - correct answer The illustration representing the flow of goods
and services between firms and households
Production Possibilities Frontier/ Production Possibility Curve - correct answer a
graph that shows the combinations of output that an economy can possibly produce
given the available factors of production and the available production technology
Imports - correct answer Goods produced abroad and sold domestically
Exports - correct answer Goods produced domestically and sold abroad
Update ) Questions & Answers
100% Correct - (Grade A)
Scarcity - correct answer Limited nature of society's resources. Example: OIL
Choice - correct answer Human behavior to choose how to spend/use the world's
scarce resources.
Trade Offs - correct answer 1st Principle of Economics-the fact that people's choice
results in losing one quality or aspect of something in exchange for a quality or aspect
of another
Private Property - correct answer Goods or Services owned by a person for exclusive
use
Opportunity Cost - correct answer Whatever must be given up to obtain a good or
service
There's no such thing as a free lunch! - correct answer Milton Friedman famous quote
explaining that even in a free lunch, you are still paying opportunity cost (gas to get
somewhere, time it takes, etc)
, Efficiency - correct answer Society getting the most out of its scarce resources
Equality - correct answer The property of distributing economic prosperity uniformly
among the members of society
Incentive - correct answer 4th principle of economics. Something that induces a
person to act a certain way (cigarette tax increase in the hopes to stop smoking)
Marginal Change - correct answer Small incremental changes to a plan of action (why
buying in bulk is sometimes a better deal)
Circular Flow Model - correct answer The illustration representing the flow of goods
and services between firms and households
Production Possibilities Frontier/ Production Possibility Curve - correct answer a
graph that shows the combinations of output that an economy can possibly produce
given the available factors of production and the available production technology
Imports - correct answer Goods produced abroad and sold domestically
Exports - correct answer Goods produced domestically and sold abroad
