AP MicroeconomicsMonday, May 4, 2026 1 hour 10 min Afternoon session
(12-1 PM local time) verified exam
Unit 1: Basic Economic Concepts (Questions 1–20)
1. Which of the following best defines scarcity?
A) Limited wants with unlimited resources
B) Unlimited wants with limited resources
C) Equal distribution of resources
D) The barter system
Answer: B
Rationale: Scarcity exists because human wants exceed available resources.
2. The opportunity cost of attending college is:
A) Tuition only
B) Tuition + books + room & board
C) The highest-valued alternative given up
D) The total cost of living
Answer: C
Rationale: Opportunity cost = value of next best alternative.
,3. A production possibilities curve (PPC) shifts outward due to:
A) Unemployment
B) Technological improvement
C) Inefficient production
D) Decreased labor force
Answer: B
Rationale: Economic growth (technology or more resources) shifts PPC out.
4. A point inside the PPC represents:
A) Efficiency
B) Unattainability
C) Inefficiency or unemployment
D) Future growth
Answer: C
Rationale: Inside the curve = underutilization of resources.
5. Which of the following is a normative statement?
A) The unemployment rate is 5%
,B) The government should increase the minimum wage
C) Inflation is 2% annually
D) GDP grew by 3%
Answer: B
Rationale: Normative statements involve value judgments (“should”).
6. The law of increasing opportunity cost explains why PPC is:
A) Linear
B) Convex to origin
C) Concave to origin
D) Vertical
Answer: C
Rationale: Resources are not equally efficient in all uses → concave shape.
7. Which of the following would cause a movement along the PPC?
A) New technology
B) Increase in labor force
C) Reallocation of resources
D) Economic growth
, Answer: C
Rationale: Movement along = changing production combo; shifts = growth.
8. If a country produces at a point on its PPC, it is:
A) Inefficient
B) Unattainable
C) Efficient
D) Underemployed
Answer: C
Rationale: On the curve = maximum output with given resources.
9. Comparative advantage is based on:
A) Absolute efficiency
B) Lower opportunity cost
C) Higher output
D) More resources
Answer: B
Rationale: Each should produce where opportunity cost is lowest.
(12-1 PM local time) verified exam
Unit 1: Basic Economic Concepts (Questions 1–20)
1. Which of the following best defines scarcity?
A) Limited wants with unlimited resources
B) Unlimited wants with limited resources
C) Equal distribution of resources
D) The barter system
Answer: B
Rationale: Scarcity exists because human wants exceed available resources.
2. The opportunity cost of attending college is:
A) Tuition only
B) Tuition + books + room & board
C) The highest-valued alternative given up
D) The total cost of living
Answer: C
Rationale: Opportunity cost = value of next best alternative.
,3. A production possibilities curve (PPC) shifts outward due to:
A) Unemployment
B) Technological improvement
C) Inefficient production
D) Decreased labor force
Answer: B
Rationale: Economic growth (technology or more resources) shifts PPC out.
4. A point inside the PPC represents:
A) Efficiency
B) Unattainability
C) Inefficiency or unemployment
D) Future growth
Answer: C
Rationale: Inside the curve = underutilization of resources.
5. Which of the following is a normative statement?
A) The unemployment rate is 5%
,B) The government should increase the minimum wage
C) Inflation is 2% annually
D) GDP grew by 3%
Answer: B
Rationale: Normative statements involve value judgments (“should”).
6. The law of increasing opportunity cost explains why PPC is:
A) Linear
B) Convex to origin
C) Concave to origin
D) Vertical
Answer: C
Rationale: Resources are not equally efficient in all uses → concave shape.
7. Which of the following would cause a movement along the PPC?
A) New technology
B) Increase in labor force
C) Reallocation of resources
D) Economic growth
, Answer: C
Rationale: Movement along = changing production combo; shifts = growth.
8. If a country produces at a point on its PPC, it is:
A) Inefficient
B) Unattainable
C) Efficient
D) Underemployed
Answer: C
Rationale: On the curve = maximum output with given resources.
9. Comparative advantage is based on:
A) Absolute efficiency
B) Lower opportunity cost
C) Higher output
D) More resources
Answer: B
Rationale: Each should produce where opportunity cost is lowest.
