suite 2 Show your work (b) Assume the price of a unit of good X is $5. The chart only includes prompts that use the up to date format, but all past prompts before then are also linked below. (e) Is point f in the elastic, inelastic, or unit elastic portion of the demand curve? (ii) What quantity will be produced? For example, countries can specialize in what they are good at producing and then trade for goods and services that they are not as efficient at. Social efficiency is affected by government policy and the structure of markets. (b) When the output is 8 units, what is the profit per unit? (i) Market output and price, labeled as “QM” and “PM”, respectively (ii) Callahan’s output and price, labeled as “QF” and “PF”, respectively (b) Now assume that the government provides farm support to apple growers by granting an annual lump-sum subsidy to all apple growers. (i) The equilibrium price and quantity for the corn market, labeled as PM1 and QM1, respectively (ii) The equilibrium quantity for Farmer Roy, labeled as QF1 (b) For Farmer Roy’s corn, is the demand perfectly elastic, perfectly inelastic, relatively elastic, relatively inelastic, or unit elastic? (Explain.) Explain. How do you do marginal analysis? For the short run, answer the following. Marginal analysis allows us to explain how consumers make choices about what goods and services to purchase. Assume the market wage rate increases from w1 to w2. Explain. Explain (b) Bananas are an input for muffins (i) Draw a correctly labeled graph of the market for muffins indicating the equilibrium price and quantity, labeled P0 and Q0 respectively (ii) On the graph drawn in part (b)(i), show the impact of an increase in the price of bananas on the muffin market, labeling the new equilibrium price and quantity P1 and Q1, respectively (iii) On the same graph, shade the area that represents the change in consumer surplus (c) In the market for coffee, the equilibrium price is $3 per cup and the equilibrium quantity is 100 cups. Suppose the government imposes a price floor on bananas at $1.20 per pound, causing the quantity supplies to increase to 1500 pounds per week (i) Would this cause a shortage, surplus, or neither? (ii) What will be the value of the consumer surplus? Explain, Supply and Demand, Elasticity, cross price elasticity, price controls, (a) In the market for bananas, the equilibrium price is $1/pound and the equilibrium quantity is 1000 pounds per week. FillUp is earning a positive economic profit (a) Draw a correctly labeled graph for FillUp and show each of the following (i) FillUp's profit maximizing quantity, Qf, (ii) FillUp's profit-maximizing price, labeled Pf, (iii) The deadweight loss associated with FillUp's profit maximizing quantity, shaded completely (iv) the maximum quantity at which fillup would earn zero economic profit, labeled Qz (b) Assume that FillUp's fixed costs increase becase of a new lease on its property and FillUp stays in business. Farmer Roy is a typical producer of corn. Explain. Using the labeling on the graph, identify the area representing each of the following. (iii) How does the average total cost for Farmer Roy at QF2 compare with PM2? (c) Identify the dominant strategy for Roadway (d) Is choosing an early departure a dominant strategy for Rankin Wheels? Fiveable Community students are already meeting new friends, starting study groups, and sharing tons of opportunities for other high schoolers. Redraw the payoff matrix to reflect the effect of the higher advertising costs. Practice questions in Albert's AP® Microeconomics and review how individuals and firms make decisions in various situations of economic pressures. (c) Is the demand price elastic, inelastic, or unit elastic between the prices of $5 and $6 ? Explain (iii) Calculate the firm's ATC for its current level of production and show your work (iv) If the firm's output is sold in a competitive market, what is the lowest output price at which the third unit of labor would be hired? (i) The marginal social cost curve, labeled MSC (ii) The marginal social benefit curve, labeled MSB (iii) The deadweight loss, if any, shaded completely (c) Now instead assume that all of the neighbors enjoy watching the fireworks. The graph below shows Loriland’s sugar market, and PW represents the world price. (a) Calculate the producer surplus before the tax. Find out more, read a sample chapter, Microeconomics Unit 1 Sample Multiple Choice Answers: 1. (1)The profit-maximizing output (2)The socially efficient output (ii) At the socially efficient output, is the monopoly making a profit or incurring a loss? Mandy spends all her money and buys only these two goods. Does the value of Theresa’s income elasticity indicate that bagels are normal goods, inferior goods, substitutes, or complements? Explain, Market Failure and the Role of the Government, (a) Identify the market failure shown in the graph and explain (b) Using the numbers on the graph, identify the market equilibrium price and quantity (c) Using the labeling on the graph, identify the area representing the deadweight loss at the quantity identified in part (b). Explain. (i) In this case, is the market equilibrium quantity of fireworks greater than, less than, or equal to the socially optimal quantity? It shows us all of the possible production combinations of goods, given a fixed amount of resources. Assume that corn is produced in a perfectly competitive market. Explain. The AP Micro exam will take place on May 20th at 4PM Eastern. (a) In which market structure do these firms operate? Save my name, email, and website in this browser for the next time I comment. AP Microeconomics Exam Free-Response Question and Scoring Information Archive Download free-response questions from past exams along with scoring guidelines, sample responses from exam takers, and scoring distributions.AP Exams are regularly updated to align with best practices in college-level … Not only will it allow you to, of course, test your skills on the different topics on AP Micro (especially your graphing skills), but you will know exactly what to expect going into test day. (a) Draw a correctly labeled graph of the market for fireworks and show the market equilibrium price and quantity, labeled PE and QE. The marginal product of the machine is 60 widgets per machine-hour. What happens to the opportunity cost of studying history? Find the value of: the monopolist's profit and the new consumer surplus, Perfectly competitive labor market, minimum wage. In economics, utility is defined as satisfaction. Each cafe produces a slightly differentiated product and there are no barriers to entry or exit and the firm is in long run equilirbium (a) Draw a correctly labeled graph showing Camden's demand curve, marginal revenue curve, marginal cost curve, and the LRATC curve. (Explain means why!!!) We’ve created a sortable table of all the. Since the AP Micro exam changed somewhat in their format in 2005, there are only released exams up to 2006 with questions using the updated format. Draw a correctly labeled side-byside graph for the corn market and for Farmer Roy and show each of the following. (b) Assume that the price of wheat, an input for the production of bagels, increases. (i) The profit-maximizing quantity of cable services, labeled as Q* (ii) The profit-maximizing price, labeled as P* (iii) The area of economic profit, completely shaded (iv) The socially optimal level of cable services, assuming no externalities, labeled as QS (b) Assume that the government grants CableNow a lump-sum subsidy of $1 million. Show your work, (a) What is Martha's marginal benefit of the fifth unit of good X? 2010 Average 6.02/10 1… Redraw the payoff matrix under the government subsidy system (i) Would quicklunch choose a high or low price? We’ve created a sortable table of all the AP Micro past prompts! What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain using numbers from the table (b) Assume that the firm has 2 units of capital and 3 units of labor (i) Calculate the marginal product for the third unit of labor (ii) Did the firm experience diminishing marginal returns with the addition of the third unit of labor? Make sure your graph is large enough to be legible. Redraw your graph from part A and label the ceiling price as P2. PowerPoint: AP Microeconomics: 1.4 Production Possibilities Curve. The production possibilities curve is the first graph that we study in microeconomics. Use marginal analysis to explain, Production, Cost, and Perfect Competition, Perfectly competitive firms, price controls, (a) Draw correctly labeled side-by-side graphs for the corn market and a representative corn farmer. ap microeconomics frq 2003, This 2003 AP® Macroeconomics Free-Response Questions Form B AP Test Prep is suitable for 10th - 12th Grade. Unit 1 : An introduction of Ten Principles of Economics in Mankiw, Principles of Microeconomics Unit 2 : Basic concepts of Microeconomics and fundamental economic systems Unit 3: Why people should specialize and trade with others (Specific contents about opportunity cost and comparative advantage) (i) Callahan’s quantity of output. Practicing free-response questions (FRQs) for your AP Exam will help you immensely. CableNow is the only supplier of cable TV services offering a wide range of TV channels. (i) How will the new technology affect the quantity of the workers hired? Your email address will not be published. (a) Calculate the total producer surplus at the market equilibrium price and quantity, show your work (b) If the government imposes a price floor at $16, is there a shortage, a surplus, or neither? Utility and price elasticity of demand are important concepts in explaining consumer behavior. Explain. (f) Assume instead that regulators impose a price ceiling of $22. Explain. Assume John Lamb employs a fixed number of employees and rents a machine for a variable number of hours from a perfectly competitive market. Explain, (a) Nirali spends 3 hours studying microeconomics and 2 hours studying history. Using the labeling on the graph, indicate the monopolist’s price. make up 33% of your exam score. Explain. (ii) Assume supply for coffee is perfectly elastic. (d) Assuming no externalities, how does the tax affect allocative efficiency? (ii) Calculate the price elasticite of supply if price increases from $1 to $1.20. Explain. (b) Suppose the government imposes a $2 per unit tax on the producers of gasoline. (c) If the two firms cooperate in choosing locations, where will each firm locate? (ii) Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. Assume that CableNow does not practice price discrimination. Explain. *AP® and Advanced Placement® are registered trademarks of the College Board, which was not involved in the production of, and does not endorse, this product. (d) Between the prices of $16 and $18, is the monopolist in the elastic, inelastic, or unit elastic portion of its demand curve? (i) The marginal private cost and marginal social cost of good X, labeled MPC and MSC, respectively (ii) The market quantity, labeled Qm (iii) The allocatively efficient quantity, labeled Qs (iv) The area of deadweight loss, shaded completely (b) Assume that a lump-sum tax is imposed on the producers of good X. (e) Assume that regulators set an output of 11 units. Scarcity is the basic problem in economics in which society does not have enough resources to produce whatever everyone needs and wants. (b) Calculate the total consumer surplus if Martha consumes 5 units of X. AP Macroeconomics Unit 2 FRQ Test Booklet Name 1. (iii) Suppose the price of a unit of good X drops to $3. The marginal product of labor is 28 widgets per worker hour and the wage rate is $14 per hour. Explain. Explain (e) If both firms know all of the information if the payoff matrix but do not cooperate, what will be Rankin Wheels' daily profit? Explain. (i) The quantity produced (ii) The total revenue received by the monopolist (c) Instead, assume the monopolist charges a single price and is regulated to produce the socially efficient quantity. Under the government imposes a lump-sum subsidy is granted machine-hours ( ii ) will Steverail ’ s quantity,. F in the long run for coffee is perfectly competitive labor market, minimum wage a goal maximizing! Been cancelled, freeing up an additional hour to studying microecnomics or history review individuals... Assume Nirali has a goal of maximizing the sum of her Test scores questions like FRQ 2 and 3. Hard candies in country Alpha offering a wide range of TV channels must decide whether to advertise or to advertise... 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