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🤑AP Microeconomics
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🤑AP Microeconomics

FRQ 1 – Long
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Unit 1: Basic Economic Concepts
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Practice FRQ 1 of 191/19

1. Agraria and Industria are two countries that produce wheat and steel using equal amounts of resources. The table below shows the maximum possible production of each good for both countries if they use all their available resources. Assume that the opportunity costs are constant.

Table 1. Maximum Production Possibilities

Country

Wheat (bushels)

Steel (tons)

Agraria

100

25

Industria

40

40

A.

Draw a correctly labeled graph of the production possibilities curve for Agraria and show each of the following.

i.

The numerical values of the vertical and horizontal intercepts

ii.

A point labeled U representing a level of production where there is unemployment in Agraria

B.

Calculate the opportunity cost of producing one ton of steel for each country. Show your work.

i.

Calculate the opportunity cost of one ton of steel for Agraria. Show your work.

ii.

Calculate the opportunity cost of one ton of steel for Industria. Show your work.

C.

Based on the data in Table 1 and your calculations in part B, answer the following.

i.

Which country has the comparative advantage in the production of steel? Explain.

ii.

Which country has the absolute advantage in the production of wheat? Explain.

D.

Identify a specific number of bushels of wheat that could be traded for one ton of steel that would be mutually beneficial to both countries. Explain why this terms of trade is beneficial.

E.

Assume that Agraria develops a new fertilizer that doubles the productivity of its wheat resources but has no effect on steel production.

i.

On your graph in part A, draw the new production possibilities curve for Agraria.

ii.

Will the opportunity cost of producing one ton of steel in Agraria increase, decrease, or remain the same? Explain.

Required Graph Drawing

Timed

00:00

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Free Response Question Practice

This practice environment simulates the AP AP Microeconomics Free Response Questions section. Here are some guidelines:

  • Read each question carefullybefore responding. Pay attention to command verbs like "identify," "explain," "analyze," or "evaluate."
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  • Mark for Review if you want to come back to a question later.
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Tip: Answer all parts of each question. Partial credit is often available, so even if you are unsure, provide what you know.