Download Section 2

AP Macroeconomics
Test on Sections 1 and 2 (Modules 1-8)
Tuesday, October 8, 2013
PLEASE BRING A #2 PENCIL WITH YOU FOR THE MULTIPLE CHOICE
QUESTIONS. There will be 30 multiple choice questions and 2 problems on the
test. For the problems, know how to evaluate the effect on equilibrium price and
quantity caused by a change in supply and/or demand.
Section 1
1. Definitions:
 Opportunity Cost
 Economic Model
 Business Cycle
 Inflation
 Recession
 Efficiency
 Increasing Opportunity Cost
2. You should be able to answer questions about the Production
Possibilities Curve and Comparative Advantage.
Section 2
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
3. Understand how shortages drive prices up, surpluses drive prices down.
4. Know about price ceilings and price floors.
5. Know how to determine the change in equilibrium price and quantity due to a
change in demand and or supply.