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Macro Unit 1 Practice Sheet

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5K views

Macro Unit 1 Practice Sheet

Uploaded by

Nandini Jha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Macroeconomics

Unit 1 Practice Sheet


​ ssume that the table below shows the economy of Cliffordland.
Part 1- Production Possibilities​- A

1. Calculate the opportunity cost of switching from combination A to producing B.


2. Calculate the opportunity cost of switching from combination B to producing D.
3. Calculate the opportunity cost of switching from combination B to producing A.
4. Calculate the opportunity cost of switching from combination D to producing B.

5. Is this an example of increasing opportunity cost or constant opportunity cost? Explain.

6. Assume the economy of Cliffordland intentionally decides to produce combination D rather than
combination B. What is the long-term trade-off of this decision? Explain.

Part 2- FRQ Practice-​ Complete the following question from the 2019 AP exam (Set 2, Question 3).

© Copyright Jacob Clifford 2020. ​Ultimate Review Packet


Teachers- Do NOT use this in your classroom. ​Contact me​ if you want to use this resource with your students
Macroeconomics
Unit 1 Practice Sheet
Part 3- Comparative Advantage​-​ ​Answer the following questions to verify that you fully understand
opportunity cost, absolute advantage, comparative advantage, and terms of trade.
Hours needed to produce one unit
Units produced per hour
Planes Cars
Beef Peppers
Mexico 12 6
China 20 5
Bolivia 25 5
France 8 4

11. Is this an output problem or an input problem?


1. Is this an output problem or an input problem?

12. What is Mexico’s opportunity cost of producing


2. What is China’s opportunity cost of
1 plane?
producing 1 pepper?

13. What is Bolivia’s opportunity cost of producing


3. What is France’s opportunity cost of
1 car?
producing 1 beef?

14. What is Mexico’s opportunity cost of producing


4. What is China’s opportunity cost of
1 car?
producing 1 beef?

15. What is Bolivia’s opportunity cost of producing


5. What is France’s opportunity cost of
1 plane?
producing 1 pepper?

16. Who has the absolute advantage in producing


6. Who has the absolute advantage in
cars?
producing beef?

17. Who has the absolute advantage in producing


7. Who has the absolute advantage in
planes?
producing peppers?

18. Who has the comparative advantage in


8. Who has the comparative advantage in
producing cars?
producing beef?

19. Who has the comparative advantage in


9. Who has the comparative advantage in
producing planes?
producing peppers?

20. What would acceptable terms of trade be


10. What would acceptable terms of trade be
between Mexico and Bolivia?
between China and France?

© Copyright Jacob Clifford 2020. ​Ultimate Review Packet


Teachers- Do NOT use this in your classroom. ​Contact me​ if you want to use this resource with your students

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