AP MicroeconomicsAP
Markets, elasticity, and market failures.
Overview
AP Microeconomics studies how individuals and firms make decisions and how markets allocate resources.
Why it matters
Develops analytical and modeling skills to understand incentives, market outcomes, and policy effects.
Skills you’ll build
- Supply & demand modeling
- Elasticity & welfare
- Cost curves
- Game theory basics
Topic Breakdown (Units)
Unit 1: Basic Economic Concepts
- Scarcity & PPC
- Comparative advantage
- Marginal analysis
Unit 2: Supply and Demand
- Market equilibrium
- Elasticity
- Consumer/producer surplus
Unit 3: Production, Cost, and the Perfect Competition Model
- Short-run vs long-run
- Costs & revenues
Unit 4: Imperfect Competition
- Monopoly
- Monopolistic competition
- Oligopoly
Unit 5: Factor Markets
- Derived demand
- Labor markets
- Wage determination
Unit 6: Market Failure and the Role of Government
- Externalities
- Public goods
- Regulation & antitrust
Lessons & Notes
Unit 1: Basic Economic Concepts
Core principles of choice under scarcity.
- opportunity cost
- specialization & trade
Unit 2: Supply and Demand
How markets set prices and quantities.
- shifters
- welfare
Unit 3: Production, Cost, and the Perfect Competition Model
Firm behavior and profit maximization.
- MC, ATC, AVC
- shutdown rule
Unit 4: Imperfect Competition
Market power and strategic behavior.
- MR=MC
- deadweight loss
- cartels
Unit 5: Factor Markets
Inputs markets and income distribution.
- MRP=MRC
- human capital
Unit 6: Market Failure and the Role of Government
When markets misallocate and policy responses.
- Pigouvian tax/subsidy
- free rider