AP Economics Final Exam Study Sheet Krugman Text 2018- Mace 2025/2026 Update

Microeconomics deals with - ANS-individuals, housing, and individual firm behavior
Macroeconomics deals with - ANS-the economy as a whole rather than the individual
markets, including national, regional, and global economies
Too little spending in an economy often leads to - ANS-recession
Scarcity in economics means - ANS-not having sufficient resources to produce all the
goods and services we want
The short-run alternation between economic downturns, recessions, and economic
upturns and expansions is known as the - ANS-business cycle
Inflation is a situation where - ANS-price levels increase and the value of money
decreases
Use the "Consumer and Capital Goods" Figure 3-3. The movement from Curve 1 to
curve 2 indicates - ANS-economic growth
Use the "Consumer and Capital Goods" Figure 3-3. Point Z - ANS-unattainable at that
time
Gains from trade arise because of - ANS-specialization in production
Use the "Alphaland and Omegaland" Figure 4-4. The opportunity cost of producing 1
tire in Alphaland is ½ radio(s), while the opportunity cost of producing 1 tire in
Omegaland is - ANS-2 radio(s)
Which of the following factors cause a movement along the demand curve? - ANSChange in price of the good
If goods A and B are substitutes, a decrease in the price of good B will - ANS-decrease
the demand for good A
Use the "Demand for Coconuts" Figure 5-1. If coconuts are considered a normal good
and the overall income level of consumers is falling, then the movement that would take
place in the model could be - ANS-E-B
A direct relationship between price and quantity is represented by - ANS-the supply
curve