By Eric Dodge
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Extra resources for 5 Steps to a 5 AP Microeconomics and Macroeconomics
III. Price is set above marginal cost, creating allocative inefficiency. ATC MC A. B. C. D. E. P3 AVC P2 P1 P0 I only II only III only I and II only II and III only 21. Which of the following is necessarily a characteristic of oligopoly? 3 17. The shutdown point is seen at: A. B. C. D. E. P0, q0 P1, q1 P2, q2 P3, q3 P3, q4 18. If the market price of the output increases from P1 to P3, the profit-maximizing firm will A. increase output from q1 to q4 and earn positive economic profits. A. Free entry into and exit from the market.
B. Increased immigration of foreign citizens and their families. C. A decrease in the average number of children per household. D. Subsidies given to college students who major in elementary education. E. The state decreases the number of classes required to receive a teaching certificate. 25. Which of the following statements is true about the demand for labor? A. It rises if the price of a substitute resource falls and the output effect is greater than the substitution effect. B. It falls if the price of the output produced rises.
The money supply and the real interest rate. inflation and unemployment. investment and the real interest rate. 30 • What You Need to Know About the AP Economics Exams 16. If the economy is experiencing a recession, how will a plan to decrease taxes for consumers and increase spending on government purchases affect real GDP and the price level? A. B. C. D. E. GDP rises and the price level falls. GDP falls and the price level rises. GDP rises and the price level rises. GDP falls and the price level falls.
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