<p> AP Microeconomics “Free” Response Questions</p><p>Production-possibilities Curve</p><p>1999 #2 Production-possibilities Curve (wheat and cloth, comparative advantage) 2003 #3 Production-possibilities Curve (absolute/comparative advantage, terms of trade) 2008 #3 Production-possibilities Curve (absolute/comparative advantage, terms of trade)</p><p>Supply, Demand, Price Floor, Price Ceiling, Elasticity</p><p>1990 #2 Inelastic Portion of the Demand Curve 1996 #2 Supply/Demand (circus, price ceiling) 1994 #2 Supply/Demand (tax on cigarettes, elasticity of demand) 1993 #2 Supply/Demand (coffee/cream, supply/demand in product/factors markets) 1998 #1 Supply/Demand (elasticity, price floor, allocative efficiency) 2000 #3 Supply/Demand (tariffs, elasticity) 2005 #2 Supply/Demand (taxes, consumer/producer surplus, deadweight loss)</p><p>Utility</p><p>2002 #3 Utility (apples/oranges, total utility, marginal utility) 2008 #2 Utility (utility, marginal utility, perfectly inelastic, tax on product) </p><p>Perfect Competition</p><p>1990 #1 Perfect Competition (increase in demand) 1996 #3 Perfect Competition (MC, ATC, AVC) 2001 #1 Perfect Competition (graphs, AVC shut down, LR) 1989 #1 Perfect Competition (price ceiling) 1999 #1 Perfect Competition (price ceiling) 1993 #1 Perfect Competition (decrease in energy costs, MC, AVC, entry/exit) 2001 #1 Perfect Competition (graphs, AVC shut down, LR) 1992 #2 Perfect Competition (price ceiling, increase in wholesale price) 1991 #2 Perfect Competition (change in marginal and average costs) 2005 #1 Perfect Competition (demand decrease, shut down rule, long run) 2006 #2 Perfect Competition (costs—fixed costs, marginal cost, profit maximization, constant costs, per-unit tax) 2008 #1 Perfect Competition (graphs, lump-sum subsidy, profit, long run vs. short short run)</p><p>Monopoly</p><p>1989 #2 Monopoly 1992 #1 Monopoly (basic, economic efficiency) 1993 #3 Monopoly (single airline, fixed costs go up) 1994 #3 Monopoly (basic, barriers to entry) 1998 #3 Monopoly (elasticity of demand, price discrimination) 1997 #2 Monopoly (normal profits, economic efficiency) 2003 #2 Monopoly (basic, consumer surplus, deadweight loss) 2006 #1 Monopoly (graph with many questions relating to graph, accounting profits allocative efficiency) 2007 #1 Monopoly (graph, per-unit tax, per-unit subsidy)</p><p>Perfect Competition AND Monopoly (Combined)</p><p>1996 #1 Perfect Competition/Monopoly (dictator to PC, economic efficiency) 1999 #3 Perfect Competition/Monopoly (graphs, D = MR, D does not = MR) 2000 #1 Perfect Competition/Monopoly (elasticity, consumer surplus, allocative efficiency) 2008 #3 Perfect Competition/Monopoly (price celing, social efficiency, natural monopoly)</p><p>Monopolistic Competition</p><p>2004 #3 Monopolistic Competition Graph</p><p>Oligopoly</p><p>2007 #3 Game Theory (Roadway and Rankin)</p><p>Factors Market</p><p>1997 #1 MRP = MFC (Jones T-shirts) 2001 #3 MRP = MFC (Sparkle Car Wash, wages) 2005 #3 MRP = MFC (MP, MRP, MFC, how many workers?) 1998 #2 MRP = MFC (dim. Marginal returns, MP/AP curve, MP vs. AVC) 2003 #3 MRP = MFC (definition of MRP, side-by-side graph of PC of PC labor industry/individual market, increase in tech/productivity) 1000 #2 MRP = MFC (wages, p.c., profit) 1991 #1 Perfect Competition in the factors market 2002 #1 Perfect Competition/Monopoly (monopoly/p.c., PC factors market) 2007#2 MRP = MFC (table, graph MRP = MFC, profit-max., increased productivity, MRP = MFC)</p><p>MSB = MSC </p><p>2001 #2 MSC = MSB (externalities) 2002 #2 MSC = MSB (both MSC and MSB curves shift) 1997 #3 Marginal analysis (MC, MSB, MSC, MP/P) 1994 #1 Perfect Competition (wages, MRP = MFC, Price floor) 2003 #1 Perfect Competition (smoke alarm, short run/long run profits, positive externalities in the market) 2004 #1 Externality and Monopoly Graph 2006 #3 Negative externality, positive externality, per-unit subsidy, graphing</p><p>Tariffs and World Trade 2004 #2 Domestic/World Graph, tariffs AP Macroeconomics “Free” Response Questions</p><p>Production-possibilities Curve</p><p>1999 #2 Production-possibilities Curve (wheat and cloth, comparative advantage) 2003 #3 Production-possibilities Curve (absolute/comparative advantage, terms of trade) 2008 #3 Production-possibilities Curve (absolute/comparative advantage, terms of trade)</p><p>Circular Flow and GDP</p><p>1997 #2 Circular Flow (circular flow/AD/flow of expenditures/flow of earnings) 1999 #2 GDP (flow of expenditures/flow of earnings, what is included in GDP) 2007 #3 GDP (what is and is not included)</p><p>Monetary Policy</p><p>1993 #2 Reserve Requirement (T-account) 1996 #3 Reserve Requirement (MS, simple money multiplier, limitations) 2001 #3 Reserve Requirement (M1, M2, maximum loans, limitations) 2004 #3 FED buys bonds, T account, increase in the money supply</p><p>Aggregate Supply and Aggregate Demand (Monetary/Fiscal/LR)</p><p>1989 #1 AS/AD (economy less than full employment, fiscal/monetary, LR) 1990 #1 AS/AD (economy is ideal, fiscal, monetary, LR) 1993 #1 AS/AD (economy is perfect, fiscal messes it up, monetary corrects it) 1996 #1 AS/AD (high inflation, fiscal, monetary, limitations of these policies) 1998 #2 Sell Bonds (interest rates, investment, AD, PL, Q) 1998 #1 AS/AD (economy is perfect, fiscal policy messes it up, monetary policy, debt, deficit, supply-side tax policy, LR, AS, PP curve) 2000 #1 AS/AD (deep recession, monetary, fiscal, I, long run AS) 2000 #3 Money Market Graph (interest rates, components of AD, AD/AS, PL, Q) 2001 #1 AS/AD (less than full employment, fiscal, money demand, interest rates, corporate taxes, AD/AS, PL, Q) 2002 #1 AS/AD (economy has high unemployment, fiscal, monetary, interest rates) 2004 #1 AS/AD, state of economy, FED, flexible wages and prices 2005 #1 AS/AD, (economy is perfect, goes into recession, FED policies, real interest </p><p>International Market AND Exchange Rates</p><p>1996 #2 Exchange Rates (Yen, Franc, Mark, $, X, M, international value of $) 1998 #3 International value of the currency (change in labor productivity) 2000 #2 Exchange Rates (demand for French goods, increase in interest rate, international value of $) 2001 #2 Exchange Rates (international value of $, X, M) 2002 #3 International Value of $ (interest rates, X, M) 2003 #2 Inflation (effects on fixed interest account, fixed interest loan, how fiscal and monetary policy can correct inflation, affect of inflation on nominal rates, affect of inflation on international value of $) 2004 #2 Loanable funds and exchange market 2005 #2 Loanable funds, deficit spending, investment, international value of $ 2008 #2 Balance of Payments, current vs. capital account, currency exchange market)</p><p>Aggregate Supply and Aggregate Demand (Monetary/Fiscal/LR/International)</p><p>1992 #2 AS/AD (increase in AD, monetary, fiscal, international value of $, X, M) 1994 #3 Increase Productivity (AS, P, Q, X, international value of $) 1997 #3 AS/AD (recession, fiscal, monetary, X, M, international value of $) 1999 #1 AS/AD (increase in relative interest rates, value of $, X, M, I, AD, AS, fiscal, monetary) 2003 #1 AS/AD (severe recession, fiscal, monetary, value of $, X, M) 2006 #1 AS/AD (current state, energy costs rise, AS/AD, international value of $) 2007 #1 AS/AD (money market demand, AS/AD, international value of $)</p><p>Aggregate Supply Shift </p><p>1991 #1 AS/AD (supply shock, fiscal, monetary, X, M) 1994 #1 AS/AD (stagflation, fiscal, monetary) 1994 #2 Long Run Growth (short-term interest rates, aggregate expenditures, GDP) 1999 #3 AS/AD (increase in investment, AD, Capital Stock, LR, AS, Q, PP curve) 2002 #2 AS/Long-run effect (decrease in labor participation, increase in gov. deficit, decrease in quantity of inputs required to produce, increase in quality of education, increase in savings rate)</p><p>Difficult OR Misc. Questions</p><p>1997 #1 Interest rate/Money demand sensitivity 1993 #3 Nominal Wages Rise Faster than Labor Productivity (what happens to the general price level, X, international value of the $) 2005 #3 Phillips curve (short run and long run) 2006 #2 Loanable funds market, money market, real interest, nominal interest 2006 #3 Unemployment, natural rate of unemployment, part-time employees and unemployment rate, Phillips curve. 2007 #2 Federal funds rate, multiplier, nominal interest rate, real interest rate 2008 #1 Phillips Curve, recession, spending multiplier, tax multiplier, loanable loanable funds </p>