Download AP Microeconomics Syllabus

Altoona High School, Advanced Placement Microeconomics
I.
Basic Economic Concepts
A. opportunity costs and trade-offs
Text: McConnell & Brue, Chapter 1: Limits, Alternatives, and Choices
i.
Key Graph: Production Possibilities Curve
B.Basic Economic Questions: what to produce, how to produce them, and to whom to distribute
them.
C.Specialization and exchange
D. Absolute and comparative advantage, determining mutually advantageous trade
Text: McConnell & Brue, Chapter 5: The U.S. in the Global Economy
E.Property Rights, the role of incentives in the free market, and marginal analysis
Text: McConnell & Brue, Chapter 2: The Market System and the Circular Flow
III. Product Markets
A. Supply and demand
Text: McConnell & Brue, Chapter 3: Demand, Supply, and Market Equilibrium
McConnell & Brue, Chapter 33: The Economics of the Health Care Market
i.
Determinants of supply and demand
ii.
Impact on equilibrium price and output.
iii.
distinction between movements along the curves and shifts in the curves.
iv.
price floors and ceilings, excise taxes, tariffs, and quotas
v.
consumer surplus
vi.
producer surplus
vii.
Elasticities
1. price, cross-price, income elasticities of demand, and the price elasticity of supply.
B.Consumer choice
Text: McConnell & Brue, Chapter 19: Consumer Behavior and Utility Maximization
i.
utility, the law of diminishing marginal utility, and utility-maximizing conditions
ii.
Impact on consumer activity: Incomes, prices, and tastes
iii.
individual's demand curve
iv.
how individual and market demand curves are related
v.
Income and substitution effects
C.Production and cost analysis in the short and long run
Text: McConnell & Brue, Chapter 20: The Costs of Production
i.
short-run production function
1. Average and marginal products
2. Law of diminishing marginal returns
3. Economies and diseconomies of scale
4. Returns to scale.
D. Market structures
1. definition of profits: distinction between accounting and economic profits, and
establishing the profit-maximizing rule
2. Perfect Competition
Text: McConnell & Brue, Chapter 21: Perfect Competition
a.
short-run and long-run equilibrium for firm and industry
b.
price, marginal revenue, average revenues, marginal costs, average costs, and
profits at equilibrium.
c.
long-run equilibrium adjustment process.
3. Monopoly
Text: McConnell & Brue, Chapter 22: Pure Monopoly
a.
sources of monopoly power
b.
monopolist's demand curve versus marginal revenue curve
c.
total revenue and monopolist’s demand curve
d.
Allocative efficiency in competitive and non-competitive industries
e.
price discrimination
4. Oligopoly
Text: McConnell & Brue, Chapter 23: Monopolistic Competition and Oligopoly
a.
Collusion and cartels
b.
Game-theory model
5. Monopolistic Competition
Text: McConnell & Brue, Chapter 23: Monopolistic Competition and Oligopoly
a.
market structure
b.
Product Differentiation and advertising
c.
short run and in the long run behavior
d.
Excess capacity
IV. Factor Markets
A. Supply and demand in factor markets
Text: McConnell & Brue, Chapter 25: The Demand for Resources
i.
Labor market
Text: McConnell & Brue, Chapter 26: Wage Determination
1. Derived demand
2. labor supply and wage and employment determination
3. minimum wages, unions, monopsonies
ii.
Land and Capital
Text: McConnell & Brue, Chapter 27: Rent, Interest, and Profit
1. economic rent
2. interest rate – investment demand relationship
3. distribution of income and income inequality
V. Market Failure and the Role of Government
A. Roles of Government in a market economy
Text: McConnell & Brue, Chapter 28: Government and Market Failure
McConnell & Brue, Chapter 29: Public Choice Theory and Taxation
i.
Externalities, public goods, distribution of income, subsidies, taxes, quantity controls,
controlling monopoly-related market failures
ii.
Marginal social benefit and marginal social cost principle
iii.
Lorenz Curve
iv.
Gini coeffeicient
v.
Transfer payments