AP Microeconomics Practice Exam 1 questions with correct answers

At the birthday party of your best friend, you see Skylar help himself to a second piece of cake. For this individual, it must be the case that: CORRECT ANSWER The marginal benefit of the second piece of the cake is greater than the marginal cost. Nancy has the choice to spend one hour studying for an exam, mowing the lawn for one hour at a wage of $6, or babysitting her niece for one hour at a wage of $8. If we know that Nancy has chosen to study for the exam, which of the following is true?: CORRECT ANSWER The benefit received from studying is greater than the opportunity cost of $8. Suppose the market for roses is currently in equilibrium. If the supply of roses falls, while at the same the demand for roses rises, what can you say about the price and quantity of roses in the market?: CORRECT ANSWER Price rises, but the change in quantity is ambiguous. The United States is trading salmon to Peru in exchange for anchovies. If these nations re trading based upon relative opportunity costs, what must be the case?: CORRECT ANSWER The United States has comparative advantage in the salmon production, and Peru has comparative advantage in the anchovy production. Which of the following is the best example of a public good?: CORRECT ANSWER The volunteer fire department in your community. Which of the following statements are true of a capitalist market economy?: CORRECT ANSWER II. and III. only.