AP® Microeconomics

Flashcards

210 cards with the terms and ideas you need to know cold. The ones you find hard come back sooner.

Multiple choice practice

339 exam-style questions, timed like the real exam, with every answer explained.

Practice exam

The whole multiple choice section: 60 questions in 1 hour 10 minutes, weighted by unit like the real exam. A fresh mix every time.

Must-know sheet

The facts, rules and terms to know cold on exam day, on one page. Filter it by unit, or print it.

Free-response practice

24 free-response questions like the ones on the exam. Score your answer with the rubric and a model answer, or sign in for free AI scoring.

Basic Economic Concepts

6 topics · 37 videos

• Scarcity forces people, firms and countries to make trade-offs
• Opportunity cost is the value of the next-best option you give up
• Specializing by comparative advantage and then trading lets both sides gain
• Good decisions compare marginal benefit with marginal cost
• You get the most satisfaction when the last dollar spent on each good adds the same utility

Supply and Demand

9 topics · 57 videos

• A change in a good's own price moves you along a curve; anything else shifts the curve
• Elasticity measures how strongly quantity responds to price, income or other prices
• A competitive market's equilibrium makes total surplus as large as possible
• In an otherwise efficient market, price controls, taxes, subsidies and tariffs create deadweight loss
• Who really pays a tax depends on elasticity: the less elastic side pays more

Production, Cost, and the Perfect Competition Model

7 topics · 42 videos

• Diminishing marginal returns are why marginal cost eventually rises
• Firms make the most profit where marginal revenue equals marginal cost
• Economic profit subtracts implicit costs too, so zero economic profit is still a normal profit
• In the short run a firm keeps producing as long as price covers average variable cost
• In the long run, entry and exit push perfectly competitive firms to zero economic profit at minimum average total cost

Imperfect Competition

5 topics · 34 videos

• For a firm with market power, marginal revenue is less than price
• Every firm maximizes profit where MR = MC, then charges what demand allows
• Market power usually means less output, higher prices and deadweight loss
• Free entry drives monopolistically competitive firms to zero economic profit in the long run
• In an oligopoly, each firm's best move depends on what its rivals do

Factor Markets

4 topics · 26 videos

• The demand for a factor is derived from the demand for the product it makes
• Hire until marginal revenue product equals marginal factor cost
• The cheapest input mix gets the same extra output from the last dollar spent on each input
• A firm in a perfectly competitive labor market takes the wage as given
• A monopsony hires fewer workers at a lower wage than a competitive market would

Market Failure and the Role of Government

5 topics · 31 videos

• The efficient quantity is where marginal social benefit equals marginal social cost
• Externalities make markets produce too much or too little
• Free riders cause markets to under-provide public goods
• Government policy can fix market failures but can also create deadweight loss
• Lorenz curves and Gini coefficients show how unequally income is shared