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AP Macroeconomics Unit 1 Questions
and Answers 100% Pass
Capital - ✔✔Produced goods that can be used as inputs for further production, such as factories,
machinery, tools, computers and buildings
Ceteris Paribus - ✔✔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 - ✔✔Two goods that are used jointly in consumption.
Consumers' Surplus - ✔✔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) - ✔✔Decision making characterized by weighing the
additional benefits of a change against the additional costs of a change with respect to current conditions.
Demand - ✔✔The willingness and ability of buyers to purchase different quantities of a good at different
prices during a specific time period.
Demand Schedule - ✔✔The numerical tabulation of the quantity demanded of a good at different prices.
Disequilibrium - ✔✔A state of either surplus of shortage in a market.
Economic System - ✔✔The way in which society decides to answer key economic questions- in particular
those questions that relate to production and trade.
Economics - ✔✔The science of scarcity; the science of how individuals and societies make choices because
of scarcity.
Emily Charlene © 2025, All Rights Reserved.
, 2|Page
Entrerpreneurship - ✔✔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 - ✔✔The price-quantity combination from which there is no tendency for buyers or sellers to
move away.
Equilibrium Price (Market Clearing Price) - ✔✔The price at which quantity demanded of the good equals
quantity shipped.
Equilibrium Quantity - ✔✔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 - ✔✔The physical and mental talents people contribute to the production process.
Land - ✔✔All natural resources, such as minerals, forests, water, and unimproved land.
Law of Demand - ✔✔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 - ✔✔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.
Law of Increasing Opportunity Costs - ✔✔As more of a good is produced, the opportunity costs of
producing that good increases, Ceteris Paribus.
Law of Supply - ✔✔As the price of a good rises, the quantity supplied of the good rises, and as the price
of a good falls, the quantity supplied of the good falls, Ceteris Paribus.
Emily Charlene © 2025, All Rights Reserved.
AP Macroeconomics Unit 1 Questions
and Answers 100% Pass
Capital - ✔✔Produced goods that can be used as inputs for further production, such as factories,
machinery, tools, computers and buildings
Ceteris Paribus - ✔✔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 - ✔✔Two goods that are used jointly in consumption.
Consumers' Surplus - ✔✔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) - ✔✔Decision making characterized by weighing the
additional benefits of a change against the additional costs of a change with respect to current conditions.
Demand - ✔✔The willingness and ability of buyers to purchase different quantities of a good at different
prices during a specific time period.
Demand Schedule - ✔✔The numerical tabulation of the quantity demanded of a good at different prices.
Disequilibrium - ✔✔A state of either surplus of shortage in a market.
Economic System - ✔✔The way in which society decides to answer key economic questions- in particular
those questions that relate to production and trade.
Economics - ✔✔The science of scarcity; the science of how individuals and societies make choices because
of scarcity.
Emily Charlene © 2025, All Rights Reserved.
, 2|Page
Entrerpreneurship - ✔✔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 - ✔✔The price-quantity combination from which there is no tendency for buyers or sellers to
move away.
Equilibrium Price (Market Clearing Price) - ✔✔The price at which quantity demanded of the good equals
quantity shipped.
Equilibrium Quantity - ✔✔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 - ✔✔The physical and mental talents people contribute to the production process.
Land - ✔✔All natural resources, such as minerals, forests, water, and unimproved land.
Law of Demand - ✔✔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 - ✔✔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.
Law of Increasing Opportunity Costs - ✔✔As more of a good is produced, the opportunity costs of
producing that good increases, Ceteris Paribus.
Law of Supply - ✔✔As the price of a good rises, the quantity supplied of the good rises, and as the price
of a good falls, the quantity supplied of the good falls, Ceteris Paribus.
Emily Charlene © 2025, All Rights Reserved.
