1995 AP Microeconomics Ex amination 1 MICROECONOMICS Section I Time—70 minu tes 60 Qu estions Directions: Each of the questions or incomplete statements below is followed by five suggested answers or completions. Select the one that is best in each case and place the letter of your choice in the corresponding box on the student answer sheet. 1. The allocation of resources in a market economy is described by which of the following statements? I. The government decides which goods will be produced and which consumers will receive them. II. Buyers and sellers exchange goods and services on a voluntary basis. III. Prices and costs help producers decide whether they are producing too little or too much of a good. A. Ⅰonly B. Ⅱ only C. Ⅲ only D. Ⅰ and Ⅲ only E. Ⅱand Ⅲ only 2. If the government imposes a tax on the production of cars, which of the following will occur in the market for cars? A. There will be a movement to the right along the supply curve. B. There will be a movement to the right along the demand curve. C. The supply curve will shift to the right. D. The supply curve will shift to the left. E. The demand curve will shift to the right. 3. Which of the following is true of a price floor? A. The intention of the government in creating the price floor is to assist the producers of the good. B. To have an impact in the market for the good, the price floor should be set below the existing market price of the good. C. An effective price floor will increase the quantity demanded of the good. D. The price floor would tent to create a shortage of the good in the market. E. The creation of the price floor would not change the quantity supplied of the ...
