Page 51 - Krugmans Economics for AP Text Book_Neat

Tackle the Test: Multiple-Choice Questions
1. Which of the following is an example of a resource? a. watching TV and listening to music
I. petroleum b. watching TV
II. a factory c. listening to music
III. a cheeseburger dinner d. sleeping
a. I only e. the price of the book Section I Basic Economic Concepts
b. II only
4. Which of the following statements is/are normative?
c. III only
I. The price of gasoline is rising.
d. I and II only
II. The price of gasoline is too high.
e. I, II, and III
III.Gas prices are expected to fall in the near future.
2. Which of the following situations represent(s) resource scarcity? a. I only
I. Rapidly growing economies experience increasing levels b. II only
of water pollution. c. III only
II. There is a finite amount of petroleum in the physical d. I and III only
environment. e. I, II, and III
III. Cassette tapes are no longer being produced.
5. Which of the following questions is studied in
a. I only
microeconomics?
b. II only
a. Should I go to college or get a job after I graduate?
c. III only
b. What government policies should be adopted to promote
d. I and II only
employment in the economy?
e. I, II, and III
c. How many people are employed in the economy this year?
3. Suppose that you prefer reading a book you already own to d. Has the overall level of prices in the economy increased or
watching TV and that you prefer watching TV to listening to decreased this year?
music. If these are your only three choices, what is the e. What determines the overall salary levels paid to workers in a
opportunity cost of reading? given year?

Tackle the Test: Free-Response Questions

1. Define resources, and list the four categories of resources. What 2. In what type of economic analysis do questions have a “right”
characteristic of resources results in the need to make choices? or “wrong” answer? In what type of economic analysis do
questions not necessarily have a “right” answer? On what type
of economic analysis do economists tend to disagree most
Answer (6 points)
frequently? Why might economists disagree? Explain.
1 point: Resources are anything that can be used to produce something else.
1 point each: The four categories of the economy’s resources are land, labor,
capital, and entrepreneurship.
1 point: The characteristic that results in the need to make choices is scarcity.

module 1 The Study of Economics 9