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AP Macroeconomics Test on Sections 1 and 2 (Modules 1-8) Monday, October 17, 2016 PLEASE BRING A #2 PENCIL WITH YOU FOR THE MULTIPLE CHOICE QUESTIONS. There will be 35 multiple-choice questions and 1 problem on the test. For the problem, know how to evaluate the effect on equilibrium price and quantity caused by a change in supply and/or demand. Make sure you can identify the non-price determinants of supply and demand. Section 1 Module 1: Macroeconomics vs Microeconomics Scarce economic resources Opportunity cost Module 2: Economic Model Business Cycle Inflation Recession Module 3: Production Possibilities Curve Efficiency Increasing Opportunity Cost Module 4: Comparative Advantage (only a couple of questions – not much emphasis on this). Section 2 (Modules 5-7) 1. Definitions: a. Law of Demand b. Law of Supply 2. Know how to distinguish between: a change in quantity supplied or demanded cause : change in price effect: movement along the same supply or demand curve. and a change in supply or demand cause : change in a non- price determinant effect: shift in the supply or demand curve. Know what the non-price determinants of supply and demand are and how they affect the supply and demand curve (listed on pgs.56 and 65 and handout on supply and demand passed out in class 3. Understand how shortages drive prices up, surpluses drive prices down. 4. Know how to determine the change in equilibrium price and quantity due to a change in demand and or supply. Module 8: Questions about price floors and ceilings will be limited to: Price floors are price controls established by the government. They are a minimum price to protect the seller, set above the equilibrium price. They create permanent surpluses. Price ceilings are created as a maximum price to protect the consumer from equilibrium prices that are too high and create permanent shortages.