AP Microeconomics Exam Review /
Key Questions & Expertly Verified
Answers, .
Quiz____?
Economics -
Answer✓✓
The study of how people, firms, and societies use their scarce productive
resources to best satisfy their unlimited wants
Quiz____?
Factors of Production -
Answer✓✓
Labor, Land, Capital, Entrepreneurial ability
Quiz____?
Physical capital -
Answer✓✓
Manmade equipment like machinery, but also buildings, roads, vehicles,
and computers
Quiz____?
Entrepreneurial Ability -
Answer✓✓
The effort and know how to put the other resources (Factors of Production)
together in a productive venture
Page 1 of 47
, Quiz____?
Scarcity -
Answer✓✓
The difference between unlimited wants and limited economic resources
Quiz____?
Trade-offs -
Answer✓✓
The fact that we are faced with scarce resources implies that individuals,
firms, and governments are constantly faced with trade-offs
Quiz____?
Opportunity Cost -
Answer✓✓
The opportunity cost of doing something is what you sacrifice to do it (i.e.
if you use a scarce resource to pursue activity X, the opportunity cost of
activity X is activity Y, the next best use of that resource)
Quiz____?
Marginal Analysis -
Answer✓✓
Rational individuals and firms weigh the additional benefits against the
additional costs (They think at the margin)
Page 2 of 47
, Quiz____?
Marginal -
Answer✓✓
"the next one" or "additional" or "incremental"
Quiz____?
Marginal Cost -
Answer✓✓
The additional cost incurred from the consumption of the next unit of a
good or service
Quiz____?
Marginal Benefit -
Answer✓✓
The additional benefit received from the consumption of the next unit of a
good or service
Quiz____?
Production Possibilities Curve -
Answer✓✓
A model of an individual or a nation that can choose to allocate its scarce
resources between the production of two goods or services, it is assumed
that those resources are being fully employed and used efficiently
Quiz____?
Points outside of the Production Possibilities Curve -
Page 3 of 47
, Answer✓✓
Any point outside the frontier is currently unattainable
Quiz____?
The slope of the PPF -
Answer✓✓
The slope of the curve measures the opportunity cost of the good on the x
axis
The inverse of the slope measures the opportunity cost of the good on the
y axis
Quiz____?
Shape of a realistic PPF -
Answer✓✓
Concave or bowed outward
Quiz____?
Comparative Advantage -
Answer✓✓
The ability to produce goods at a lower opportunity cost that another
individual/firm/nation
Quiz____?
Specialization -
Answer✓✓
Page 4 of 47
Key Questions & Expertly Verified
Answers, .
Quiz____?
Economics -
Answer✓✓
The study of how people, firms, and societies use their scarce productive
resources to best satisfy their unlimited wants
Quiz____?
Factors of Production -
Answer✓✓
Labor, Land, Capital, Entrepreneurial ability
Quiz____?
Physical capital -
Answer✓✓
Manmade equipment like machinery, but also buildings, roads, vehicles,
and computers
Quiz____?
Entrepreneurial Ability -
Answer✓✓
The effort and know how to put the other resources (Factors of Production)
together in a productive venture
Page 1 of 47
, Quiz____?
Scarcity -
Answer✓✓
The difference between unlimited wants and limited economic resources
Quiz____?
Trade-offs -
Answer✓✓
The fact that we are faced with scarce resources implies that individuals,
firms, and governments are constantly faced with trade-offs
Quiz____?
Opportunity Cost -
Answer✓✓
The opportunity cost of doing something is what you sacrifice to do it (i.e.
if you use a scarce resource to pursue activity X, the opportunity cost of
activity X is activity Y, the next best use of that resource)
Quiz____?
Marginal Analysis -
Answer✓✓
Rational individuals and firms weigh the additional benefits against the
additional costs (They think at the margin)
Page 2 of 47
, Quiz____?
Marginal -
Answer✓✓
"the next one" or "additional" or "incremental"
Quiz____?
Marginal Cost -
Answer✓✓
The additional cost incurred from the consumption of the next unit of a
good or service
Quiz____?
Marginal Benefit -
Answer✓✓
The additional benefit received from the consumption of the next unit of a
good or service
Quiz____?
Production Possibilities Curve -
Answer✓✓
A model of an individual or a nation that can choose to allocate its scarce
resources between the production of two goods or services, it is assumed
that those resources are being fully employed and used efficiently
Quiz____?
Points outside of the Production Possibilities Curve -
Page 3 of 47
, Answer✓✓
Any point outside the frontier is currently unattainable
Quiz____?
The slope of the PPF -
Answer✓✓
The slope of the curve measures the opportunity cost of the good on the x
axis
The inverse of the slope measures the opportunity cost of the good on the
y axis
Quiz____?
Shape of a realistic PPF -
Answer✓✓
Concave or bowed outward
Quiz____?
Comparative Advantage -
Answer✓✓
The ability to produce goods at a lower opportunity cost that another
individual/firm/nation
Quiz____?
Specialization -
Answer✓✓
Page 4 of 47
