Catherine Zulueta
2.4.5 Test
AP Microeconomics
1. Opportunity Costs
A. Explain how you would make the decision to take an honors class rather than a regular class.
Make sure to use the terms self-interest and benefits in your response. (5 points)
One would take an honors class rather than a regular class for their own self interest. By taking
a higher level course at school, you can get a better job and earn more money. A regular class
would not result in the benefits of a higher GPA or the higher chances of getting into a good
college with an honors class.
B. What costs are involved in the decision to take an honors class rather than a regular class?
(5 points)
Those who take an honors class rather than a regular class have to sacrifice their time to take a
higher level course. They may have to give up some extracurriculars in order to prepare for an
honors course.
2. Suppose you're absolutely confident that you've misplaced a $5 bill somewhere in your
neighborhood. How long will you search for that money? Explain your answer. Use the concept
of sunk costs in your explanation. (6 points)
I probably would not search for the money for a long time, maybe 20 minutes at maximum.
Despite knowing it is somewhere in the neighborhood, the hours of searching for my $5 bill is a
sunk cost that is not worth $5. I can easily make more money, but I cannot make more time.
Rather, I can spend that time doing other productive tasks.
3. Absolute and Comparative Advantage
A. What's the difference between absolute and comparative advantage? (5 points)
Absolute advantage is when an individual or nation can produce a good or service more
efficiently than another group by using fewer resources. Comparative advantage is when an
individual or nation can produce goods and services at lower opportunity costs, with less
sacrifices than others.
B. If a person or country has a comparative advantage in a certain activity, what should they do
to maximize their position in a larger market? (5 points)
If a person or country has a comparative advantage in a certain activity, they should specialize
in that activity in order to maximize their position. That way, they produce more with less
sacrifices.
4. Positive and Normative Economics
A. Write a positive economic statement about poverty. (5 points)
Poverty causes a country’s economy to decline.
B. Write a normative economic statement about poverty. (5 points)
2.4.5 Test
AP Microeconomics
1. Opportunity Costs
A. Explain how you would make the decision to take an honors class rather than a regular class.
Make sure to use the terms self-interest and benefits in your response. (5 points)
One would take an honors class rather than a regular class for their own self interest. By taking
a higher level course at school, you can get a better job and earn more money. A regular class
would not result in the benefits of a higher GPA or the higher chances of getting into a good
college with an honors class.
B. What costs are involved in the decision to take an honors class rather than a regular class?
(5 points)
Those who take an honors class rather than a regular class have to sacrifice their time to take a
higher level course. They may have to give up some extracurriculars in order to prepare for an
honors course.
2. Suppose you're absolutely confident that you've misplaced a $5 bill somewhere in your
neighborhood. How long will you search for that money? Explain your answer. Use the concept
of sunk costs in your explanation. (6 points)
I probably would not search for the money for a long time, maybe 20 minutes at maximum.
Despite knowing it is somewhere in the neighborhood, the hours of searching for my $5 bill is a
sunk cost that is not worth $5. I can easily make more money, but I cannot make more time.
Rather, I can spend that time doing other productive tasks.
3. Absolute and Comparative Advantage
A. What's the difference between absolute and comparative advantage? (5 points)
Absolute advantage is when an individual or nation can produce a good or service more
efficiently than another group by using fewer resources. Comparative advantage is when an
individual or nation can produce goods and services at lower opportunity costs, with less
sacrifices than others.
B. If a person or country has a comparative advantage in a certain activity, what should they do
to maximize their position in a larger market? (5 points)
If a person or country has a comparative advantage in a certain activity, they should specialize
in that activity in order to maximize their position. That way, they produce more with less
sacrifices.
4. Positive and Normative Economics
A. Write a positive economic statement about poverty. (5 points)
Poverty causes a country’s economy to decline.
B. Write a normative economic statement about poverty. (5 points)
