2018 AP Microeconomics Practice Exam Unlocked

2018 AP Microeconomics Practice Exam Unlocked

The 2018 AP Microeconomics Practice Exam provides students with a comprehensive review of key concepts and problem-solving strategies essential for success on the AP exam. It includes free-response questions that cover topics such as market structures, economic profits, and labor markets. This practice exam is designed for high school students preparing for the AP Microeconomics exam, helping them to understand complex economic theories and apply them in various scenarios. With detailed explanations and diagrams, this resource is invaluable for mastering the material and achieving a high score.

Key Points

  • Includes free-response questions focused on monopoly power and economic profit.
  • Covers topics such as labor markets and marginal revenue product.
  • Provides detailed explanations for each question to enhance understanding.
  • Designed for AP Microeconomics students preparing for the May exam.
, ,
  • newtopiccyclegrowin
213
/ 4
2018
AP Microeconomics
Free-Response Questions
© 2018 The College Board. College Board, Advanced Placement Program, AP, AP Central, and the acorn logo
are registered trademarks of the College Board. Visit the College Board on the Web: www.collegeboard.org.
AP Central is the official online home for the AP Program: apcentral.collegeboard.org.
2018 AP
®
MICROECONOMICS FREE-RESPONSE QUESTIONS
MICROECONOMICS
Section II
Total Time—1 hour
Reading Period— 10 minutes
Writing Period—50 minutes
Directions: You are advised to spend the first 10 minutes reading all of the questions and planning your
answers. You will then have 50 minutes to answer all three of the following questions. You may begin
writing your responses before the reading period is over. It is suggested that you spend approximately half
your time on the first question and divide the remaining time equally between the next two questions.
Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled
diagram mu st have all axes and curves clearly labeled and must show directional changes. Use a pen with
black or dark blue ink.
1. In the early twentieth century, limited transportation options and the lack of effective substitutes gave Single
Cinema monopoly power in a small town. Assume that Single Cinema is a profit-maximizing firm and currently
operates at a negative economic profit in the short run.
(a) Draw a correctly labeled graph for Single Cinema, and show each of the following.
(i) The profit-maximizing price and quantity of tickets, labeled as P and Q
m m
, respectively
(ii) The area representing the negative economic profit, shaded completely
(b) Explain why Single Cinema continues to operate in the short run despite earning negative economic profit in
the short run.
(c) Would Single Cinema’s total revenue increase, decrease, or stay the same if it decides to sell one fewer
ticket than Q
m
? Explain.
(d) Single Cinema hires workers in a perfectly competitive labor market with a downward-sloping demand
curve. Suppose the number of workers available in the market decreases.
(i) What will happen to the wage rate? Explain.
(ii) What will happen to the marginal revenue product of the last worker hired? Explain.
GO ON TO THE NEXT PAGE.
-2-
© 2018 The College Board.
Visit the College Board on the Web: www.collegeboard.org.
2018 AP
®
MICROECONOMICS FREE-RESPONSE QUESTIONS
2. Modern-day word processing software gives consumers the ability to create and save documents in different file
formats that can then be accessed by multiple computer operating systems. The graph below depicts a perfectly
competitive market for word processing software. In the graph, MSB is the marginal social benefit, MPB is the
marginal private benefit, MPC is the marginal private cost, and MSC is the marginal social cost.
(a) Identify the type of market failure illustrated by the graph. Explain.
(b) Using the numbers on the graph, identify the market equilibrium price and quantity.
(c) Using the labeling on the graph, identify the area representing the deadweight loss at the quantity identified
in part (b).
(d) Suppose the government is considering granting a subsidy to correct the market failure. What is the dollar
value of the per-unit subsidy that would achieve the socially optimal quantity?
(e) Suppose the government does not grant the subsidy and instead imposes a price floor at $8.
(i) How many units will consumers and producers exchange at the price floor?
(ii) Does the price floor correct the market fa
ilure? Explain.
GO ON TO THE NEXT PAGE.
-3-
© 2018 The College Board.
Visit the College Board on the Web: www.collegeboard.org.
/ 4
End of Document
213
You May Also Like

FAQs of 2018 AP Microeconomics Practice Exam Unlocked

What topics are covered in the 2018 AP Microeconomics Practice Exam?
The 2018 AP Microeconomics Practice Exam covers a variety of essential topics including market structures, monopoly power, and economic profits. It also delves into labor market dynamics and the marginal revenue product of labor. Each section is designed to test students' understanding of microeconomic principles and their ability to apply these concepts in real-world scenarios. By engaging with these questions, students can better prepare for the AP exam and enhance their grasp of microeconomic theory.
How does the practice exam help students prepare for the AP Microeconomics exam?
The practice exam provides students with an opportunity to engage with real AP-style questions, which helps them familiarize themselves with the exam format and question types. Each free-response question is accompanied by detailed explanations that clarify key concepts and problem-solving techniques. This approach not only reinforces students' knowledge but also builds their confidence in tackling complex economic problems. Additionally, the inclusion of diagrams and graphs aids in visualizing economic relationships, further enhancing comprehension.
What is the significance of understanding economic profits in microeconomics?
Understanding economic profits is crucial in microeconomics as it helps students analyze firm behavior and market structures. Economic profits indicate whether a firm is operating efficiently and can influence decisions regarding production and pricing. By studying scenarios involving negative economic profits, students learn the implications for firms in the short run and long run. This knowledge is essential for evaluating market dynamics and the impact of competition on profitability.
What role does the labor market play in the 2018 AP Microeconomics Practice Exam?
The labor market is a significant focus in the 2018 AP Microeconomics Practice Exam, particularly in terms of how wages are determined and the concept of marginal revenue product. Questions related to labor markets challenge students to apply their understanding of supply and demand principles to real-world situations. By analyzing shifts in labor supply and demand, students gain insights into wage fluctuations and employment levels, which are vital for grasping broader economic concepts.

Related of 2018 AP Microeconomics Practice Exam Unlocked