Download Happy New Year and welcome back for the final semester of your

As we move into the second half of the year, you have a little less than 4 months to prepare for the AP
Microeconomics Exam on May 15, 2014. As you have seen, we are 100% through the material that
you will be tested on. At this point, you should now have a firm grasp on many of the elementary
graphs and illustrations presented within the course. This understanding is important due to the fact
that:
“Since 1996, students have been required to draw and label their own graphs for
some parts of the free-response questions on the AP Microeconomics
Examination. Drawing graphs is not just the key to earning points directly for
your artwork; it is also the secret to solving problems that may not even require
a graph. Have you noticed that economists seem compulsive about drawing
graphs? It’s not that they are repressed artists. Rather, they know this secret:
Economics is very hard to sort out in your head but relatively easy with a few
illustrations. Invest the time necessary to learn to draw the graphs. Resist the
temptation to interpret the question with words alone. Although the graders
often permit a high point allocation for good prose (word only) responses, the
most successful prose responses are typically explanations of graphs that show
that the students understand the graphs and visualize them in their minds.”
BARRON’S How to prepare for the AP Microeconomics Exam
To complete the project, students will need to use colored pens (pencils), graphing paper,
and their text book. Students are expected to place the following graphs on the required
pages.
ILLUSTRATION WITH CORRESPONDING PAGE:
Page 1:
1. The Circular Flow Model
Page 2:
2. The Production Possibilities Frontier (Include output combinations that are
efficient, inefficient, and not feasible given the economy’s resources)
3. A Shift in the Production Possibilities Frontier with a corresponding explanation
of how such a shift is possible.
4. A Production Possibilities Frontier for Two Independent Countries (with two
respective products) and How Trade Between the Countries Increases each
Country’s Consumption. Note: Two illustrations are required here. See page
49 for assistance.
Page 3:
5. The Demand Curve. Show both an increase and a decrease in quantity demanded.
At the bottom of the graph, list the determinant that would cause a change in
quantity demanded.
6. A Market Demand Curve that is Comprised of Three Individual Demand Curves
Page 4:
7. A Shift in the Demand Curve. Show the shift in both directions (i.e. – increase and
decrease). At the bottom of the graph, list five determinants of demand that
would shift the demand curve in either direction.
Page 5:
8. The Supply Curve. Show both an increase and a decrease in quantity supplied. At
the bottom of the graph, list the determinant that would cause a change in
quantity supplied.
9. A Market Supply Curve that is Comprised of Three Individual Supply Curves
Page 6:
10. A Shift in the Supply Curve. Show the shift in both directions (i.e. – increase and
decrease). At the bottom of the graph, list six determinants of supply that
would shift the supply curve in either direction.
Page 7:
11. The Equilibrium of Supply and Demand
12. Binding Price Ceiling & Resulting Shortage
13. Binding Price Floor and Resulting Surplus
Page 8:
*For Graphs 14-19, discuss the impact on Price & Quantity either at the bottom of
each graph or off to the side.
14. Increase in Demand with Supply Remaining Constant.
15. Increase in Supply with Demand Remaining Constant
16. Increase in Demand with an Increase in Supply
17. Increase in Demand with a Decrease in Supply
Page 9:
18. Decrease in Demand with an Increase in Supply
19. Decrease in Demand with a Decrease in Supply
Page 10:
20. The Equilibrium of Supply and Demand Illustrating Consumer Surplus &
Producer Surplus
21. The Elasticity Along a Straight Line Demand Curve That Illustrates the Elastic,
Unitary Elastic, and Inelastic Ranges
Page 11:
*For Graphs 22 & 23, identify the deadweight loss and tax revenue associated within
the graph.
22. Tax Incidence: Elastic Demand with Inelastic Supply
23. Tax Incidence: Inelastic Demand with Elastic Supply
Page 12:
24. The Laffer Curve
Page 13:
*For Graphs 25-28, illustrate how free trade affects welfare in the domestic country.
25. International Trade in an Importing Country (i.e. – the World Price for the Good is
Below the Domestic Price
26. International Trade in an Exporting Country (i.e. – the World Price for the Good is
Above the Domestic Price
Page 14:
27. The Effects of a Tariff in an Importing Country
28. The Effects of a Quota in an Importing Country
Page 15:
*For Graphs 29 & 30, identify the appropriate government action needed to correct
the externality. As part of your response, discuss why the action selected impacts the
producer’s behavior.
29. Positive Externality
30. Negative Externality
Page 16:
31. Marginal Product Curve
32. Average Total Cost, Marginal Cost, Average Variable Cost, & Average Fixed
Cost Curves
33. Total Cost, Total Variable Cost, & Total Fixed Cost Curves
Page 17:
34. Short Run & Long Run Average Total Cost Curves Illustrating Economies of
Scale, Constant Returns to Scale & Diseconomies of Scale
35. Production Function
Page 18:
36. A Competitive Firm’s Short Run Supply Curve
37. A Competitive Firms’ Long Run Supply Curve
Page 19:
38. Lorenz Curve complete with an explanation of the Gini Coefficient
39. Phillips Curve
Page 20:
40. A Perfectly Competitive Firm’s Long Run Price & Quantity (Hint: Normal
Profits)
41. A Perfectly Competitive Firm’s Short Run Illustrating Positive Economic Profit
42. A Perfectly Competitive Firm’s Short Run Illustrating Negative Economic Profit
Page 21:
43. Side by Side Graphs for a Perfectly Competitive Firm and Market: The Graph will
begin in Long-Run Equilibrium, then it will demonstrate an Increase in
Demand (Illustrating Positive Economic Profits). Finally, the graph will return
to Long Run Equilibrium and Normal Profit. Under the graphs, provide a
summary of what happens with respect to entry/exit and P&Q as you shift the
different curves.
Page 22:
44. Side by Side Graphs for a Perfectly Competitive Firm and Market: The Graph will
begin in Long-Run Equilibrium, then it will demonstrate a Decrease in
Demand (Illustrating Negative Economic Profits). Finally, the graph will
return to Long Run Equilibrium and Normal Profit. Under the graphs, provide
a summary of what happens with respect to entry/exit and P&Q as you shift
the different curves.
Page 23:
45. A Monopoly in Long Run Equilibrium – be sure to shade in both the deadweight
loss & the area of monopoly profit.
46. A Monopolist with Perfect Price Discrimination
Page 24:
47. A Monopoly in Short Run Equilibrium with Negative Economic Profit – be sure
to shade in both the deadweight loss & the area of monopoly profit.
48. A Regulated Monopoly that is producing at the Allocatively Efficient Output
Level
Page 25:
49. A Monopoly that is producing at a quantity that Maximizes Total Revenue
50. A Regulated Monopoly that is producing at a quantity where it is receiving
Normal Profit in the Long Run
Page 26:
51. A Kinked Demand Curve for an Oligopolist
52. A Monopsonist in Long Run Equilibrium
Page 27:
53. A Monopolistic Competitive Firm in Long Run Equilibrium
54. A Monopolistic Competitive Firm’s Short Run Illustrating Positive Economic
Profit
55. A Monopolistic Competitive Firm’s Short Run Illustrating Negative Economic
Profit
Page 28:
56. The Market Supply & Demand Curves for Labor (i.e. – The Factor Market)
57. An Individual Firm’s Supply & Demand Curves for Labor (i.e. – The Factor
Market). Below your graph, please state the profit maximizing criteria that
companies will use when hiring employees.
Page 29:
58. Side by Side Graphs for the Factor Market (i.e. – Labor) and a Firm: The Graph
will begin in Equilibrium and then experience an increase in supply within the
Factor Market. On the graph for the firm, illustrate how this shift in the market
will affect the firm.
59. Side by Side Graphs for the Factor Market (i.e. – Labor) and a Firm: The Graph
will begin in Equilibrium and then experience a decrease in supply within the
Factor Market. On the graph for the firm, illustrate how this shift in the market
will affect the firm.
Page 30:
60. Side by Side Graphs for the Factor Market and a Firm: The Graph will begin in
Equilibrium and then experience an increase in demand within the Product
Market. On the graph for the firm, illustrate how this shift in the Product
Market will affect both the Factor Market and the firm.
61. Side by Side Graphs for the Factor Market and a Firm: The Graph will begin in
Equilibrium and then experience a decrease in demand within the Product
Market. On the graph for the firm, illustrate how this shift in the Product
Market will affect both the Factor Market and the firm.
THE ASSIGNMENT IS DUE ON MARCH 2 AND IS WORTH 61 POINTS;
1 POINT PER GRAPH. ALL PROJECTS SHOULD BE SUBMITTED IN A
BINDER CLIP. PLEASE DO NOT PLACE YOUR PROJECT IN A FOLDER OR
STAPLE IT.
Please do a nice job as this will serve as an excellent study tool that can be used leading
up to the May 15 test date. Submitted work that is unprofessional in appearance
(i.e. – white out, correction tape, sloppiness, scribbled, graphs out of order, etc.) will
receive an automatic 20% deduction.