AP Microeconomics
Comprehensive AP Microeconomics guide covering all six units: Basic Economic Concepts (scarcity, opportunity cost, comparative advantage, marginal analysis), Supply and Demand (elasticities, government interventions, trade), Production and Cost with the Perfect Competition Model, Imperfect Competition (monopoly, monopolistic competition, oligopoly + game theory), Factor Markets (labor + monopsony), and Market Failure (externalities, public goods, inequality). Includes the nine essential graphs, the four skill categories, and a dedicated FRQ-strategy capstone with calculator-free numerical analysis tips.
Topics Covered
What you get
Unit 1: Basic Economic Concepts
THE BIG PICTURE. Unit 1 (12–15%) lays the foundational logic of how rational agents make decisions under scarcity. Four core ideas dominate: scarcity (why economics exists), opportunity cost (the true cost of any choice), comparative advantage (why trade benefits both parties), and marginal analysis (the universal decision rule). These tools recur in every later unit.
Sample Flashcards
Country X produces either 100 wheat or 50 cloth. Country Y produces either 80 wheat or 80 cloth. Who has comparative advantage in wheat?
Country X has comparative advantage in wheat; Y has CA in cloth.
OC of 1 wheat in X = 50/100 = 0.5 cloth. OC of 1 wheat in Y = 80/80 = 1 cloth. X has the lower OC for wheat, so X holds comparative advantage in wheat.
A consumer's marginal utility from pizza is 20; from soda is 8. Pizza costs $2, soda costs $1. Should she buy more pizza or soda?
Buy more pizza.
MU per dollar: pizza = 20/2 = 10; soda = 8/1 = 8. Pizza gives more utility per dollar, so buy more pizza and less soda. Continue until equalizes.
Sample Key Terms
Scarcity
The condition that resources are insufficient to satisfy all wants. The fundamental economic problem.
Factors of Production
Land (natural resources; payment = rent), labor (work; wages), capital (machines/tools; interest), entrepreneurship (organization/risk; profit). The four inputs to production.
Opportunity Cost
Value of the next-best alternative given up. Not just money: includes time, foregone benefits, any other loss.
What's Covered
- Unit 1: Basic Economic Concepts
- Unit 2: Supply and Demand
- Unit 3: Production, Cost, and the Perfect Competition Model
- Unit 4: Imperfect Competition
- Unit 5: Factor Markets
- Unit 6: Market Failure and the Role of Government
- Exam Skills: Graphs, Calculations & FRQ Strategy
7 topics · 84+ flashcards · quizzes & matching games included
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