Fundamentals
Supply and Demand
Determinants
Firm Structures
Trade
100
This flows from households to businesses through the factor market.
What are factors of production?
100
This is the law describing the rationale behind the downward-sloping demand curve.
What is the Law of Diminishing Marginal Utility?
100
The quantity demanded of this type of good increases as income decreases.
What is an inferior good?
100
Perfectly competitive industries should shut down when this condition is true.
What is P is less than AVC?
100
A point within the PPF represents this.
What is inefficient use of resources?
200
This is the problem faced by society's unlimited wants.
What is scarcity?
200
This law is the rationale behind the upward-sloping supply curve.
What is the Law of Increasing Costs?
200
This government action serves to decrease input costs and shifts supply right.
What are subsidies?
200
The demand curve for perfectly competitive industries is equal to these.
What is MR, AR, P?
200
A country has a comparative advantage in the production of a good if this is true.
What is having a lower opportunity cost?
300
Pablo can either study, mow the lawn for $10, or paint the fence for $5. The opportunity cost of him studying is this.
What is $10?
300
If iPhones suddenly become cheaper relative to Samsung phones, then people buy more iPhones. This effect represents the given situation.
What is the substitution effect?
300
Determinants of demand include related goods prices, income, expectations, number of buyers, and this.
What is consumer preferences?
300
Because a monopolist produces at P > MC, it is not this.
What is allocatively or productively efficient?
300
This is what occurs in a domestic market when the world price of a freely traded commodity is above the domestic equilibrium price.
What is exporting?
400
Factors of production include, land, labor, capital, and this.
What is entreprenurial ability?
400
This situation is caused by a price ceiling, where quantity demanded exceeds quantity supplied.
What is a shortage?
400
Determinants of supply include government actions, technology, producer expectations, input prices, number of sellers, and this.
What are unexpected shocks?
400
A monopolistically competitive firm makes this type of profit in the long run.
What is normal?
400
Outward shifts of the PPF can be caused by these.
What are increases in quality or quantity of the factors of production?
500
Given society's unlimited wants and limited resources, society must make these.
What are trade offs?
500
This is the difference between the price a consumer is willing to pay and the price actually paid.
What is consumer surplus?
500
The Law of Supply states that given this, quantity supplied increases as price increases.
What is all other things equal?
500
Relationships between oligopolist firms are characterized by this principle.
What is mutual interdependence?
500
If Japan can produce 5 computers in an hour and the US can produce 10 computers in 2 hours, the absolute advantage belongs to this party.
What is neither?
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