The AP Exams in economics were introduced in 1989. The major content areas covered by the AP Microeconomics Exam are broken down by the following table which reflects the approximate percentage of the multiple-choice section of the exam devoted to each content area:
The free-response questions on the exam generally ask students to analyze a given economic situation and present and evaluate general macroeconomic principles. Students are expected to write well-organized and analytical essays and to include explanatory diagrams that clarify their analysis. Questions may require students to interpret graphs or to draw their own graphs as part of their answers. All graphs should be clearly labeled. Generally, the longer essay (50 percent of the free-response score) requires students to interrelate several content areas, while the two shorter essays (together, 50 percent of the free-response score) typically focus on a specific topic in a given content area
8-14% economic concepts 50-70% nature and functions of product markets 10-18% factor markets 12-18% market failure and the role of government
Exam Format:
Multiple Choice: 60 questions, 70 minutes
Free Response: 3 FRQs, 10 minute reading period, 50 minute writing period
There is a separate exam for Micro and Macro- 2 chances for success!
COURSE DESCRIPTION:
On the collegeboard website, you can find out detailed information about the exam, the breakdown of topics, and specifics of the course.
http://apcentral.collegeboard.com/apc/public/repository/ap-economics-course-description.pdf
Here is a detailed breakdown of the topics covered on the exam, broken down by percentage.
I. Basic Economic Concepts . (8–14%)
A. Scarcity, choice and opportunity cost
B. Production possibilities curve
C. Comparative advantage, absolute advantage, specialization and trade
D. Economic systems
E. Property rights and the role of incentives
F. Marginal analysisII. The Nature and Functions of Product Markets (55–70%)
A. Supply and demand (15–20%)
1. Market equilibrium
2. Determinants of supply and demand
3. Price and quantity controls
4. Elasticity
a. Price, income and cross-price elasticities of demand
b. Price elasticity of supply
5. Consumer surplus, producer surplus and market efficiency
6. Tax incidence and deadweight lossB. Theory of consumer choice (5–10%)
1. Total utility and marginal utility
2. Utility maximization: equalizing marginal utility per dollar
3. Individual and market demand curves
4. Income and substitution effects
C. Production and costs (10–15%)
1. Production functions: short and long run
2. Marginal product and diminishing returns
3. Short-run costs
4. Long-run costs and economies of scale
5. Cost minimizing input combination
D. Firm behavior and market structure (25–35%)
1. Profit:
a. Accounting versus economic profits
b. Normal profit
c. Profit maximization: MR=MC rule
2. Perfect competition
a. Profit maximization
b. Short-run supply and shutdown decision
c. Behavior of firms and markets in the short run and in the long run
d. Efficiency and perfect competition
3. Monopoly
a. Sources of market power
b. Profit maximization
c. Inefficiency of monopoly
d. Price discrimination
e. Natural monopoly4. Oligopoly
a. Interdependence, collusion and cartels
b.. Game theory and strategic behavior
5. Monopolistic competition
a. Product differentiation and role of advertising
b. Profit maximization
c. Short-run and long-run equilibrium
d. Excess capacity and inefficiencyIII. Factor Markets . (10–18%)
A. Derived factor demand
B. Marginal revenue product
C. Labor market and firms’ hiring of labor
D. Market distribution of incomeIV. Market Failure and the Role of Government (12–18%)
A. Externalities
1. Marginal social benefit and marginal social cost
2. Positive externalities
3. Negative externalities
4. Remedies
B. Public goods
1. Public versus private goods
2. Provision of public goods
C. Public policy to promote competition
1. Antitrust policy
2. Regulation
D. Income distribution
1. Equity
2. Sources of income inequality
