The <a “href=”https://occameducation.com/what-is-advanced-placement-ap/”>Advanced Placement Microeconomics exam represents half of the AP Economics curriculum (the AP Macroeconomics exam being the other half). The Microeconomics exam covers supply and demand, different kinds of firms and how they behave, prices, wages, and the basics of government policy. Larger topics, such as the national economy, recessions and depressions, and fiscal policy, are reserved for the Macroeconomics exam.
In this post, we are going to introduce you to the basics of the AP Microeconomics exam, share some tips for scoring well, and talk about why a student would choose to take this exam.
Students will have 1 hour and 10 minutes to complete the multiple-choice section. This section consists of 60 questions and is worth 66% of the total exam score. The questions usually relate to the following topics:
- Production possibilities curve
- Comparative and Absolute Advantage; Trade
- Opportunity Cost
- Supply and Demand
- Consumer/Producer Surplus
- Taxes and Deadweight Loss
- Price/Quantity Controls
- Fixed and Variable Costs
- Perfectly Competitive Markets
- Monopolistic Competition
- Marginal Cost/Marginal Revenue
- Marginal Product of Labor/Marginal Cost of Labor
- Factor Markets
- Profit Maximization
- Market Failures; Externalities
- Government Policies and Inequality
For the free-response section, students will have 1 hour and 10 minutes to complete a series of three free-response questions, which comprise 34% of their total score. This time includes a ten minute “reading period,” where students are encouraged to outline their answers before writing them in the test booklet. Any topic that is covered in the multiple choice section of the exam may also be covered here; common topics in the past have included:
- Illustrate the supply and demand curve for an industry. Then, show how these curves change when (1) the price of a substitute changes (2) the price of a complement changes (3) technology changes (4) resources change, etc.
- Demonstrate, both graphically and verbally, the differences between a monopoly and a perfectly competitive market. When does a perfectly competitive market make a profit? What about a monopoly? What is the relationship between price and marginal revenue in these two markets? How will these markets looks in the long term?
- Demonstrate, both graphically and verbally, the effects of an externality on a market. If the externality is positive, how does the demand curve shift? If the externality is negative, how does the demand curve shift? How can a government intervene to address these externalities?
- Complete a game theory table based on a certain scenario. Identify dominant strategies (if any), Nash equilibria (if any). Is this an example of a prisoner’s dilemma?
- Illustrate the market for labor. How does this market set a wage? What is the marginal product of labor? How would a minimum wage affect this market? What about a recession?
How hard is it to score a 4 or 5?
Like most AP exams, a relatively small percentage of students receive the highest marks. In 2016, 15.3% of students scored a 5, 27.3% of students scored a 4, 23% of students scored a 3, and 34.4% of students scored below a 3. TotalRegistration suggests that the most difficult topic for students in 2016 was Firm Behavior. The year before, Factor Markets was the trouble topic for most students.
When studying, it is important that a student remembers that although all the topics above may be covered on the test, not all topics are equally represented! Questions that cover (1) supply and demand (2) firm behavior and (3) profit maximization make up the majority of questions on this test. When studying, therefore, these topics should be emphasized.
Make sure, also, that students are able to explain every topic in Microeconomics both verbally and graphically before the exam. The correct interpretation of graphs is a skill that comes up repeatedly on this exam, and accurate, well-labeled graphs are expected on the free response questions.
The Big Question: Why take the AP Microeconomics exam?
Students who are planning to enter any academic track that focuses on business, mathematics, or economics are all encouraged to take the Microeconomics AP exam. For some colleges, a score of a 4 or 5 on this exam will allow a student to place out of introductory Microeconomics. For most schools, however, a student needs this score on both the AP Microeconomics and AP Macroeconomics exams. Thus, we encourage any student interested in Economics to eventually <a “href=”https://occameducation.com/occam-education-ap-course-selection-consultation-2/”>take both of these exams.
Students who are not planning on going into the fields listed above but who still do well in analytic subjects like physics, chemistry, or computer science may also find that this test matches their interests and abilities, and should consider taking it. No matter what subject they plan to study, having a well-rounded and challenging set of courses in high school is always something that stands out on college and university applications.