AP®︎ Microeconomics: Topic 1.5 Practice Test
Prepare for your quiz, test, or the AP exam with focused practice questions on Topic 1.5 of AP Microeconomics – Cost-Benefit Analysis.
Questions List
Topic 1.5
Question 1 Easy
This question tests the following: CBA-1.B
What is the primary goal of a cost-benefit analysis?
What You’re Being Tested On:
Explore the learning objectives taken directly from the College Board’s AP® Microeconomics Curriculum. Ensure you’re prepared for the exact topics covered on the AP® exam, in-class tests, and quizzes, and gain confidence in your mastery of the material.
Topic 1.5: Cost-Benefit Analysis
Learning Objective: CBA-1.A
a. Define opportunity cost. b. Explain the opportunity costs associated with choices. c. Calculate the opportunity costs associated with choices.
Essential Knowledge: CBA-1.A.1
Rational agents consider opportunity costs, whether implicit or explicit, when calculating the total economic costs of any decision.
Essential Knowledge: CBA-1.A.2
Total benefits form the metric “utility” for consumers and total revenue for firms.
Learning Objective: CBA-1.B
a. Explain a decision by comparing total benefits and total costs (using a table or a graph when appropriate). b. Calculate total benefits and total costs (using a table or graph where appropriate).
Essential Knowledge: CBA-1.B.1
Total net benefits, the difference between total benefits and total costs, are maximized at the optimal choice.
Essential Knowledge: CBA-1.B.2
Some decisions permit rational agents to look at only marginal benefit and marginal cost. Other decisions cannot be broken down into increments in this way and must be evaluated by looking at total benefits and total costs.
