AP Economics Course Syllabus
Microeconomics
Course Description: This course is an introduction to Microeconomics. The course
introduces students to microeconomics through five basic units. The units for the course
include: basic economic concepts, the foundation of supply and demand, market
structures and policy, factor markets, and applying economic reasoning to policy.
Course Text: The textbook for the course is the 5th edition of David C. Colander’s
Economics. The case study material is derived from the Economics instructor’s manual,
prepared by David Colander. Each case study is accompanied by three to five critical
thinking questions based on the material. In addition, the publisher provides an
interactive website www.mhhe.com/economics/colander5 for student support.
Assessment: Students will be required to graph supply, demand, and other graphappropriate topics. In addition to multiple-choice exams, students will be given free
response questions and document based questions for analysis. Students will be given
topic-appropriate questions in order to prepare for the Advanced Placement exam.
Course Content:
Unit 1
Content – Economics and Economic Reasoning, Trade, Trade-Offs and Government, the
Evolving U.S. Economy, Taxation, and Government interventions
Students will:
 Define economics and be able to identify three coordination problems that any
economy must solve
 Explain how to make decisions by comparing marginal costs and marginal
benefits
 Define opportunity cost and explain its relationship to economic reasoning
 Explain real world events in terms of economic forces, social forces, and political
forces
 Demonstrate opportunity cost with a production possibilities curve
 Relate the concept of comparative advantage to the production possibilities curve
 Identify the principle of increasing marginal opportunity cost
 State the six roles of government
 Define a market economy
 Compare and contrast capitalism and socialism
 Describe how businesses, households, and governments interact in a market
economy
 Explain how globalization has changed competition
 Be able to identify both the law of supply and the law of demand
 Identify the importance of substitution with regards to supply and demand
 Distinguish between a shift and movement along the demand curve
 Explain real-world events using supply and demand
 Identify price ceiling and price floor
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Identify price elasticity
Distinguish between the benefit to pay principle and the ability to pay principle
Additional readings to textbook:
1. Case Study 1.1 – Buffaloes Bill the Taxpayer
2. Cast Study 1.2 – A Cost-Benefit Analysis of a Spam Queen
3. Case Study 2.1 – American Grain Farmers on the Dole
4. Case Study 3.1 – Selections from Manifesto of the Communist Party, Karl
Marx and Friedrich Engels, p. 22
5. In-Class Exercise – Learning concepts through practice: HUD Fair
Housing Issues: No-No’s in Advertising
6. Case Study 6.1 – How Smokers React to Rising Prices
Unit 2
Content – the Logic of Individual Choice, Production and Cost Analysis
Students will:
 Discuss the principles of diminishing and marginal utility
 Summarize the principle of rational choice
 Explain the relationship between marginal utility and price when a consumer is
maximizing total utility
 Explain how the principle of rational choice accounts for the laws of supply and
demand
 Differentiate between economic profit and accounting profit
 Distinguish between long-run and short-run production
 Calculate fixed costs, variable costs, marginal costs, and total costs
 Distinguish the various kinds of cost curves and describe the relationships among
them
 Distinguish technical efficiency from economic efficiency
 Explain how economies and diseconomies of scale influence the shape of longrun cost curves
Additional readings to textbook:
1. In-class exercise – Cost Analysis for Coca-Cola in an emerging market like Belize
2. Case Study 10.1 – The Costs of Home Schooling
Unit 3
Content – Perfect Competition, Monopoly, Monopolistic Competition, Oligopoly an
Strategic Pricing, Real-World Competition and Technology, and Anti-Trust Policy and
Regulation
Students will:
 List the six conditions for a perfectly competitive market
 Explain why producing an output at which marginal cost equals price maximizes
total profit for a perfect competitor
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Demonstrate why the marginal-cost curve is the supply curve for a perfectly
competitive firm
Summarize how and why the decisions facing a monopolist differ from the
collective decisions of competing firms
Show graphically the welfare loss from monopoly
Explain why a price-discriminating monopolist will earn more profit than a
normal monopolist
Define the monitoring problem and state its implications for economics
Discuss why competition should be seen as a process and not a state
Explain the difference between the structure and the performance methods of
judging competition
Differentiate among horizontal, vertical, and conglomerate mergers
List five reasons why unrelated firms would want to merge
Additional reading to textbook:
1. Case Study 12.2 – Can You Patent That?
2. Case Study 13.1 – Being United is Un-American
3. Case Study 13.2 – The Cali Drug Cartel
4. Case Study 15.1 – Off Key Music
Unit 4
Content – Work and the Labor Market, Who Gets What? The Distribution of Income
Students will:
 Use the theory of rational choice to explain why an increase in the marginal tax
rate is likely to reduce the quantity of labor supplied
 List four factors that influence elasticity of labor supply
 Explain how the demand for labor is a derived demand
 Define monopsony and bilateral monopoly
 List three types of discrimination
 State what the Lorenz Curve is
 Explain how the poverty definition is both and absolute and a relative measure
 Summarize the statistical findings on income and wealth distribution
 State two alternative ways to describe income distribution
 Summarize the U.S. tax and expenditure programs to redistribute income
Additional readings to textbook:
1. Case Study 16.1 – A Deadly Labor Dispute
2. Case Study 16.2 – The “Living Wage” Gambit
3. Case Study 17.1 – Cooking the Poverty Books
4. Case Study 17.2 – Poverty and Inequality According to the U. N.
Unit 5
Content – Government Policy and Market Failures, Politics and Economics: The Case of
Agricultural Markets, Microeconomic Policy, Economic Reasoning and International
Trade Policy
Students will:
 Explain what an externality is and show how it affects the market outcome
 Describe three methods of dealing with externalities
 Define public good and explain the problem with determining the value of a
public good to society
 Explain how informational problems can lead to market failure
 List five reasons why government’s solution to a market failure could worsen the
market failure
 Describe the competitive nature of agricultural markets
 Explain the good/bad paradox in farming
 State the general rule of political economy in a democracy
 Explain how a price-support system works
 Explain, using supply and demand curves, the distribution consequences of four
alternative methods of price support
 Discuss real-world pressures faced by politicians when designing agricultural
policy
 List three reasons why economists sometimes differ in thief views on social
policy
 Explain why liberal and conservative economists often agree in their views on
social policy
 Explain the cost/benefit approach the typical economist takes to analyze
regulations
 Describe three types of failure-of-market outcomes
 Explain why economists are doubtful government can correct failure-of-market
outcomes
 Summarize the important data of trade
 Explain the principle of comparative advantage
 List three determinants of the terms of trade
 Explain three policies used to restrict trade
 Discuss why countries impose trade restrictions
 Summarize why economist generally oppose trade restrictions
 Explain how free-trade associations both help and hinder international trade
Additional reading to textbook:
1. In-Class Exercise – Graphing Marginal Social Cost, Marginal Private
Cost, and Marginal Social Benefit
2. Case Study 18.1 – Potomac Sludge
3. Case Study 19.1 – Subsidies for Farmers
4. Case Study 20.1 – Dangerous Autos and Gasoline Use
5. Case Study 21.1 – If Hormone-Treated Beef Bad for You?
6. Case Study 21.2 – A Fish Story