AP Microeconomics
AP Microeconomics is a semester course taught every other week for a full year in conjunction with
AP U.S. Government and Politics. Microeconomics will help the students learn to use an
economic thought process when making decisions. Students will also learn to express themselves
with written answers supported by text and graphic models. Students will learn the basic language
of business and economics and be able to measure and illustrate economic performance in a
variety of situations.
Main topics will include:
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Introduction to Economics and basic concepts: scarcity, needs, wants, goods, services,
opportunity costs, production possibility frontiers
Microeconomics of Product Markets: supply and demand, pricing, costs of production,
types of competition(perfect, monopoly, monopolistic, oligopolistic)
Microeconomics of Factor Markets: demand for resources, wages, profit, interest, rent
Microeconomics of Government: market failure, taxation
Microeconomic Issues: regulation, income inequality, poverty, labor (unions, discrimination,
immigration), health care
Reading: In order to be successful in a college level course of this type, it is essential that
students maximize their time and complete all assigned reading prior to class discussions. The
required reading, along with the lectures and class discussions figure prominently in their formal
evaluation on quizzes and examinations. The required reading will be substantial, but not overly
burdensome if students organize and plan accordingly (see below).
Free Response Questions: Throughout the course students will be asked to respond to free
response questions from previous AP tests. The free response section of the Microeconomics
exam contains 3 mandatory free response questions. Questions will cover the themes, issues,
concepts, and content from all seven units of the course.
Student Expectations: Students are expected to be in class every day on time. Participation points
will be given based on attendance and participation in class. Students are expected to be
prepared for class everyday. This includes having all necessary textbooks, handouts, notebooks,
folders, pens or pencils, and projects. Students are expected to turn work in on time. Students will
have 3 days to turn in late work and will lose 10% of the grade for every day the work is late. All
students must have all work in one week prior to the last day of the quarter. No late work will
accepted the last week of any grading period. No extra work will be given to students who are not
passing at the end of each quarter or semester.
AP Expectations: Students are expected to take the AP test in May. Students are expected to
work at an accelerated and more complex level than those students in a regular economics class.
The main text for AP Microeconomics will be: McConnell, Campbell R. and Stanley L. Brue.
Economics, 15th ed. Boston: McGraw-Hill, 2002. The textbook has a student handbook available
for purchase as well as a web page for students to examine chapter outlines, key terms and
concepts, and to take practice exams.
http://www.mhhe.com/economics/mcconnell15e/student_index.mhtml
Unit 1: An Introduction to Economics
Economics- Chapters 1, 2, 4
Topics: Scarcity, Choice, Opportunity Cost, PPF, Basic Marginal Benefit/
Marginal Cost Analysis, The Market System
Graphs: Production Possibilities Frontiers, Slope of a Line
Unit 2: Supply and Demand
Economics- Chapters 3, 20, 21
Topics: Demand, Supply, Changes in Demand and Supply, Law of Diminishing Marginal Benefits,
Supply, Consumer and Producer Surplus, Consumer Choice/Optimal Purchase Rule, Allocative
Efficiency, Elasticity, Total Revenue Test, Price Discrimination,
Price Floors and Ceilings, Efficiency versus Equity
Graphs: Demand and Supply Curves (Plain, Price floors and ceilings, Elasticity), Total Revenue
Unit 3: Costs and Revenues
Economics- Chapter 22
Topics: Law of Diminishing Marginal Returns, Economies of Scale, Costs
(fixed, variable, marginal), Cost Curves (relationship between curves), Total and
Marginal Revenues, Profit and Loss (MR/MC and TR/TC), Break-Even, Shut
Down, Economic Profit versus Normal Profit
Graphs: Cost Curves, Revenue Curves
Unit 4: Types of Competition
Economics- Chapters 23, 24, 25, 26
Topics: Assumptions, Relationship between Industry and Firm, Profit Maximization,
Long-Run Equilibriums, Short-Run Equilibriums and the Adjustment Mechanism,
Allocative Efficiency, Relationship Between Price and MR, Barriers to Entry, Profit Maximization,
Monopoly, Regulation, Natural Monopoly, Oligopoly and Duopoly Game Theory with Game Tree
and Payoff Matrix (dominant strategy, Nash Equilibrium, collusion, prisoner’s dilemma,
interdependence), Collusive Oligopoly, Monopolistic
Competition (long run and short run) (Note: In each imperfectly competitive market structure,
examine its effect on allocative efficiency and consumer and producer surplus, and make
comparisons to perfect competition.)
Graphs: Costs and Revenue Curves for each type of competition
Unit 5: Factor Markets
Economics- Chapters 27, 28, 29
Topics: Factors of Production (review definitions of marginal revenue, marginal product, the law of
diminishing marginal returns), Derived Demand, Marginal
Revenue Product Analysis, Optimal Purchase Rule, Perfectly Competitive Factor
Markets, Profit Maximization/Cost Minimization Rules, Monopoly, Economic
Rent, Distribution of Income Among Factors, Unions, Labor Market Issues
Unit 6: The Role of Government
Economics- Chapters 5, 30, 31
Topics: Role of Government, Public versus Private Goods, Marginal Social
Cost/Marginal Social Benefit Analysis, Market Failures, Positive and Negative
Externalities, Taxes, Free Riders, “Tragedy of the Commons”
Unit 7: Microeconomics Issues
Economics- Chapters 6, 32-36
Topics: The U.S. and the Global Economy, Anti-trust policy and regulation, Income Inequality,
Poverty, Health Care