principles of macroeconomics
exam 1 study guide
1. (1 question, 5 points) production possibilities curve (ppc): the student should be able to
graphically describe
a. which combinations are possible, and which represents a maximum
b. the opportunity cost of an economy making a choice
2. market model: the student should be able to describe and graph
a. (2 questions, 10 points total) the adjustment of a market from a surplus or
shortage situation to the equilibrium point
b. (3 questions, 15 points total) the change in the equilibrium price and quantity in
a market due to a change (shift) in supply or demand