1. AP Microeconomics Final Review
Fall 2014

2. Principles of Economics
Topics:
Scarcity
Economic Reasoning
Positive vs. Normative
Three Economic Questions
PPF or PPC
Absolute and Comparative Advantage
Productive and Allocative efficiency

3. Principles of Economics
What gave you problems
Payments for factors
Capital gets interest
Labor gets wages
Land gets rent
Entrepreneurs get profit
Productive efficiency
It costs the least

4. Principles of Economics
What gave you problems continued:
Allocative efficiency
Produce most wanted products
Allocative and Productive
Occur together at full production
Best place to operate on the PPC
Depends on what society wants

5. Supply and Demand Topics Law of Demand Law of Supply Equilibrium
Determinants of Demand
Law of Supply
Determinants of Supply
Equilibrium
Surplus and Shortage
Price Ceilings and Floors

6. Supply and Demand What gave you problems Demand vs, Quantity Demanded
Determinants of Demand
Substitutes and Compliments

7. Elasticity and Consumer Choice
Topics
Marginal Utility
Price elasticity of demand
Elasticity and total revenue
Cross Elasticities
Normal vs. Inferior Goods
Price Elasticity of Supply
Tax and Elasticity

8. Elasticity and Consumer Choice
What gave you trouble:
Law of diminishing marginal utility
Inelastic supply
Elasticity of supply in the long run and the short run
Zero cross elasticity
Price floors and surplus
Price ceilings and shortages

9. Business Costs Topics Forms of Business
Total, marginal, average product
Long run and short run
Fixed and variable costs
Economies and diseconomies of scale
Total, average, marginal cost

10. Business Costs What caused you problems Forms of business ownership
Normal and economic profit
Law of diminishing marginal return
Relationship of marginal and average costs

11. Theory of the Firm Topics Profit maximization MR=MC
Short run and long run equilibrium
Government regulation
Allocative and productive efficiency

12. Theory of the Firm What gave you problems:
Demand curve for industry and firm
Monopolistic competition
Oligopoly
Pure Competition
Monopoly

13. Theory of the Firm Topics Quantity of Labor
Marginal Product and Demand
Marginal Productivity Theory
Wages in Monopolistic and Competitive Markets
Pure economic rent vs. quasi rent

14. Theory of the Firm What gave you problems Actions of Marginal Product
Rise
Fall
Become negative
Occupational licensing
Inclusive Unionism

15. Public Choice Topics Economic function of government Economic Rent
Tax Incidence

16. Public Choice What gave you problems: Definition of economic rent
Results of raising and lowering interest rates
Regressive tax

17. Extra Resources
Videos
Khan Academy