AP Micro
Chapter 20 and 21 Test
Study Guide.
Students must know the following:
1. Production Possibilities Curves—what are they, what do they show us? -Chapter 2
2. Productive efficiency—chp 2
3. Allocative efficiency—chp 2
4. Supply and demand—finding equilibrium price and quantity on a graph—
chp 3
5. Supply and demand—understanding the supply and demand determinants
a. NITER
b. RATNEST
6. Mid-Point Formula—chp 20 –
a. How to compute the formula—what does the answer mean?
7. Total Revenue Test---is demand elastic or inelastic—how can we use total
revenue and price to tell?
8. SPLAT
9. What is the main determinant of supply elasticity?
10.Market Period, Short Run, Long Run.
11.Cross and Income elasticity—formulas. What does the answer indicate
a. Substitutes or complements
b. Normal or inferior goods
12.Total and marginal utility
13.What happens to MU as you consume more of something?
14.Satisfying our utility maximizing equation
a. MUa/Pa=MUb/Pb
b. If they are not equal, what do you do?