A new law shrinks Drenmoor's textile workforce but leaves electronics unaffected, so only the textile intercept of its PPC falls. Which of the following describes the change in the opportunity cost of producing electronics and of producing textiles?
production possibilities curve (PPC)
Review production possibilities curve (PPC) for AP Macroeconomics and try 2 free AP-style practice questions. 38 questions on this topic in AP Macro · Unit 1 · Basic Economic Concepts.
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The opportunity cost of moving from point A to point C on Northgate's PPC is
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.
36 more questions on this topic
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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."