🤑AP Microeconomics
🤑AP Microeconomics
FRQ 1 – Long
Unit 1: Basic Economic Concepts
Practice FRQ 1 of 191/19
1. Assume that the countries of Arcadia and Batavia produce only two goods: radios and televisions. Both countries have constant opportunity costs of production and use the same amount of resources.
Table 1: Maximum Annual Production
| Country | Radios | Televisions |
|---|---|---|
| Arcadia | 40 | 20 |
| Batavia | 60 | 15 |
A. Using the data in Table 1, draw a correctly labeled graph of the production possibilities curve for Arcadia, with radios on the horizontal axis and televisions on the vertical axis. Show each of the following.
i. The numerical values of the horizontal and vertical intercepts
ii. A point labeled E that represents full employment and efficient production
iii. A point labeled U that represents unemployed resources
iv. A point labeled I that is currently unattainable
B. Calculate the opportunity cost of producing one television in Arcadia. Show your work.
C. Which country has the comparative advantage in the production of radios? Explain using numbers.
D. Assume that Arcadia and Batavia specialize according to their comparative advantages and trade. Identify a specific number of radios that could be exchanged for one television that would be mutually beneficial to both countries.
E. Assume that Arcadia invents a new technology that increases the productivity of resources used to produce radios but has no effect on the productivity of resources used to produce televisions.
i. On your graph in part A, draw the new production possibilities curve for Arcadia.
ii. Will the opportunity cost of producing a television in Arcadia increase, decrease, or remain the same? Explain.
Required Graph Drawing
