Drenmoor can produce 5 wheat or 10 cloth daily; Kestrelia can produce 5 wheat or 5 cloth daily. If new technology doubles Drenmoor's wheat output only, which of the following will most likely occur?
AP Macro · Unit 1 · Basic Economic Concepts
137 AP-style multiple-choice questions and 2 free-response questions for AP Macro · Unit 1 · Basic Economic Concepts, sorted into 6 topics. Free sample questions for every topic.
6 topics137 multiple-choice2 free-response
Topic 1 of 6
comparative advantage and gains from trade
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The table shows how long each producer takes to make one unit of each good.
| Producer | Hours per cake | Hours per loaf of bread |
|---|---|---|
| Jamila | 3 | 4 |
| Salavat | 9 | 6 |
Based on the table, which of the following is true?
Sample free-response question
Wexholm and Dravenna each produce solar panels and textiles with constant opportunity costs. The table shows the maximum quantity of each good each country can produce if it uses all of its resources for that good alone.
| Country | Solar Panels | Textiles |
|---|---|---|
| Wexholm | 60 | 180 |
| Dravenna | 100 | 100 |
(a) Calculate Wexholm's opportunity cost of producing one solar panel. Show your work.
(b) Identify the country that has a comparative advantage in producing solar panels.
(c) If each country specializes according to its comparative advantage, will the combined output of the two countries increase, decrease, or remain the same? Explain.
(d) Would terms of trade of 2 textiles for 1 solar panel benefit both countries? Explain.
(e) Would terms of trade of 4 textiles for 1 solar panel be acceptable to both countries? Explain.
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Answer, then see why
The price of gasoline rises 10% and the quantity demanded falls 5%. What happens to total revenue?
Not quite. The answer is B.
Why the other options are wrong
AI grading for free-response
Write your FRQ answer and get it scored point by point against the AP rubric, with the line from your answer that earned or missed each point.
Question 13 / 4 pts
Part a1 / 1 pts
Point 1: Earned
Grader confidence 94% sureReason: Correctly identifies demand for gasoline as inelastic.
Evidence: "The price of gasoline rises and the quantity falls only a little."
Part b2 / 3 pts
Point 1: Earned
Grader confidence 91% sureReason: Graph shows relatively inelastic demand.
Evidence: Draws a steep demand curve.
Point 2: Earned
Grader confidence 88% sureReason: Correct new equilibrium price.
Evidence: Shifts supply left, P1 → P2.
Point 3: Not earned
Grader confidence 82% sureReason: With inelastic demand, a price increase raises total revenue.
Evidence: "Revenue goes down."