AP Microeconomics FRQ Room

Analyzing Shifts in Supply and Demand

This question examines the factors leading to shifts in supply and demand and requires a graphical a

Comparative Advantage and International Trade

This question focuses on comparative advantage and its role in international trade. Answer all parts

Comparative Advantage and Trade

Analyze the roles of absolute advantage and comparative advantage in determining trade patterns betw

Comparative Advantage and Trade Benefits

This question examines the concepts of absolute advantage and comparative advantage and their role i

Comparative Advantage and Trade Decisions

Evaluate comparative advantage between two countries and discuss potential gains from trade based on

Consumer Choice and Budget Constraint

This question examines consumer choice within the framework of a budget constraint.

Cost-Benefit Analysis

Analyze the concept of cost-benefit analysis including the distinction between explicit and implicit

Cost-Benefit Analysis in Investment Decisions

This question examines cost-benefit analysis in business decisions. Answer every part.

Cost-Benefit Analysis of a Public Infrastructure Project

A city is considering investing in a new public transit system. The explicit cost of the project is

Cost-Benefit Analysis: Evaluating Investment Decisions

This question examines the steps involved in cost-benefit analysis and its application to investment

Diminishing Marginal Utility and Returns

Discuss the concepts of diminishing marginal utility and diminishing marginal returns, and provide a

Economic Growth and Efficiency

Examine the concepts of economic growth, productive efficiency, and allocative efficiency in relatio

Economic Growth and the Production Possibilities Curve

This question focuses on economic growth as depicted by shifts in the Production Possibilities Curve

Economic Systems and Resource Allocation

This question examines the differences among economic systems and their methods of resource allocati

Evaluating Government Price Controls in Housing Markets

A city implements a rent control policy that sets the maximum monthly rent for apartments at $$1,000

Evaluating Trade-Offs in Personal Decision Making

Examine how individuals face trade-offs and opportunity costs when making personal decisions, such a

Factors of Production Analysis

Examine the role of the four factors of production in an economy. Discuss how each factor contribute

Factors of Production and Economic Growth

This question explores the four factors of production and how changes in these factors can influence

FRQ 3: Cost-Benefit Analysis and Decision Making

This question evaluates your understanding of cost-benefit analysis and its importance for decision

FRQ 5: Factors of Production – Analysis of Resource Allocation

This question addresses the four factors of production and the role they play in resource allocation

FRQ 7: Comparing Microeconomics and Macroeconomics

This question compares the two primary branches of economics by examining their scope, focus, and re

FRQ 10: Evaluating Explicit vs. Implicit Costs in Business Decisions

This question examines how firms account for different types of costs in order to make informed busi

Graphical Analysis of Economic Growth and Shifting PPC

This question requires a detailed graphical analysis of economic growth through shifts in the produc

Marginal Analysis and Consumer Choice

Using marginal analysis, examine how a consumer maximizes utility given a limited budget.

Marginal Analysis and Consumer Choice

This question tests your understanding of marginal utility and the principle of diminishing marginal

Microeconomics vs. Macroeconomics Decision-Making

This question asks you to differentiate between microeconomics and macroeconomics and provide real-w

Optimal Consumption Rule and Budget Allocation

Analyze consumer choice by applying the optimal consumption rule to determine efficient budget alloc

Price Controls and Subsidies: Impact on Market Equilibrium

Consider the market for a necessary medication where the initial equilibrium is determined by the de

Production Possibilities Curve (PPC) and Economic Growth

This question focuses on the Production Possibilities Curve (PPC) as a tool to illustrate trade-offs

Scarcity and Decision Making

This question examines the basic economic concept of scarcity and the resulting need for choices. An

Scarcity and Opportunity Costs

This question examines the concepts of scarcity, opportunity cost, and trade-offs in economic decisi

Time Allocation and Opportunity Costs

An individual has 24 hours in a day and must choose how many hours to dedicate to paid work versus l

Trade-Offs and Opportunity Cost in Production Decisions

Discuss how production decisions involve trade-offs and the calculation of opportunity costs.

Analyzing Income Elasticity and Market Demand Changes

Examine how changes in income affect market demand by analyzing income elasticity.

Analyzing Shifts in Demand Due to Changes in Consumer Income

This question focuses on how changes in consumer income affect the demand curve and how normal versu

Basic Demand Analysis and Shifts

This question assesses the basic principles of demand, its determinants, and the law of demand.

Changes in Consumer Preferences and Market Equilibrium

A new trend increases the popularity of a specific tech gadget, causing a shift in consumer preferen

Congestion in Urban Real Estate Development

Urban real estate development can create significant negative externalities such as increased noise

Crop Switching: Supply Decision in Agriculture Markets

A farmer produces both Crop A and Crop B. When the price of Crop B rises relative to Crop A, the far

Cross Price Elasticity: Identifying Substitutes and Complements

In a certain market, the quantity demanded of Good A changes when the price of Good B alters. Analyz

Cross Price Elasticity: Substitutes vs. Complements

Cross price elasticity of demand measures how the quantity demanded for one good responds to a chang

Deadweight Loss in a Quota-Constrained Market

A government imposes an import quota on a particular good, reducing the quantity traded from its equ

Demand Elasticity and Total Revenue Dynamics

Using provided data, analyze the impact of a price change on quantity demanded and total revenue in

Double Shifts in Supply and Demand

This question investigates scenarios in which both supply and demand shift simultaneously and the ch

Effects of a Price Ceiling on Market Outcomes

A government sets a price ceiling below the current market equilibrium price in the housing market.

Effects of a Price Ceiling on Public Transit Fares

A government imposes a price ceiling of $2 on public transit fares, while the market equilibrium is

Emission Costs in Brewery Operations

A brewery’s production process emits volatile organic compounds, leading to an environmental externa

Environmental Externality in Apparel Production

Factories producing apparel sometimes emit pollutants into waterways, imposing an environmental exte

Environmental Impact in Car Manufacturing

Car manufacturing processes often have unaccounted environmental costs due to toxic emissions. In th

Evaluating the Impact of Tariffs on Domestic Markets

A domestic market for imported cars has a demand given by $$P = 50 - 0.5Q$$ and a world supply that

FRQ 5: Price Elasticity of Supply in the Electronics Market

A manufacturer observes that when the price of an electronic gadget increases from $200 to $240, the

FRQ 9: Analyzing the Effects of a Price Floor in the Wheat Market

Suppose the government imposes a price floor on wheat that is set above the market equilibrium. The

FRQ 11: Analyzing Market Surplus and Adjustments

A certain electronic gadget is sold at a price above its equilibrium level, resulting in a surplus.

FRQ 11: Income Elasticity of Demand for Organic Vegetables

A study on organic vegetables shows that when consumer income rises by 10%, the quantity demanded in

FRQ 12: Double Shift Scenario in a Market

Suppose a new health study increases the demand for a nutritious beverage, shifting the demand curve

FRQ 12: Impact of a Per Unit Tax on Consumer and Producer Surplus in the Soft Drink Market

In a soft drink market, the initial equilibrium is at a price of $2 per unit and a quantity of 1000

FRQ 18: Variable Elasticity Across Price Ranges

Consider a good that exhibits different elasticities in separate price ranges. The following tables

Income Effect on Demand for Normal and Inferior Goods

Analyze how changes in consumer income affect the demand for normal and inferior goods.

Income Effects on Normal and Inferior Goods

This question examines how changes in consumer income affect the demand for normal and inferior good

International Trade Impact: Tariffs and Market Outcomes

The government imposes a tariff on imported electronics. Analyze how this tariff affects the domesti

Long Run vs Short Run Elasticity: Comparative Analysis

This question asks you to compare short-run and long-run price elasticity of supply through definiti

Long-run Market Adjustment in Competitive Markets

Analyze the long-run adjustments in a competitive market as firms enter or exit. Answer the followin

Market Analysis under a Price Ceiling in the Coffee Market

The government introduces a price ceiling of $2.50 on coffee, in a market with an original equilibri

Market Disequilibrium: Analyzing Shortages and Surpluses

Discuss market disequilibrium by analyzing shortages and surpluses. Answer the following parts.

Market Equilibrium and Surplus

Consider the market for good X described by the equations: $$Q_d = 100 - 2*P$$ and $$Q_s = 20 + 3*P$

Market Equilibrium and Welfare Analysis

This question involves calculating market equilibrium and evaluating consumer and producer surplus a

Market Equilibrium, Consumer and Producer Surplus

Analyze market equilibrium and welfare analysis in a widget market.

Market Equilibrium, Consumer and Producer Surplus

This question focuses on understanding market equilibrium and the calculation of consumer and produc

Minimum Wage as a Price Floor in the Labor Market

The government sets a minimum wage above the current equilibrium wage in the labor market. Analyze t

Monopolist Output, Revenue, and Price Discrimination

This question examines a monopolist's decision-making process regarding output and pricing, includin

Multi-step Analysis of Income and Price Elasticity on Market Revenue

A firm collects the following data: When price rises from $$\$20$$ to $$\$25$$, quantity demanded fa

Price Elasticity of Demand Calculation

A firm observes the following data for the market demand of its product at different prices: | Pric

Producer Surplus and Consumer Surplus Calculation

In a market characterized by the demand curve $$P = 100 - Q$$ and the supply curve $$P = 20 + 0.5Q$$

Supply Chain Dynamics: Effects of a Change in the Number of Sellers

In a market with the initial demand curve $$P = 60 - Q$$ and initial supply curve $$P = 20 + Q$$, an

Bottled Water Production and Plastic Waste

The production of bottled water has externalities associated with plastic waste. Evaluate the result

Comparative Statics: Changes in Input Prices

A firm’s short-run total cost is given by $$TC = 30 + 6*Q + Q^2$$. Suppose a rise in the wage rate c

Comprehensive Perfect Competition Market Analysis

A perfectly competitive market consists of 5 identical firms, each having a cost function $$TC(Q) =

Cost Curve Analysis and Graph Interpretation

A firm’s cost structure is illustrated in the graph provided. The graph displays the Marginal Cost (

Data Center Services and Energy Consumption Externality

Large data centers contribute to increased energy consumption, causing negative externalities that a

Derivation of Cost Functions

A firm's total cost is composed of fixed and variable costs. Derive the total cost function and anal

Economic and Accounting Profit Calculation

A firm has the following financial data for a given period as shown in the table below. Use this dat

Effect of a Per-Unit Subsidy on Production and Deadweight Loss

A government introduces a per-unit subsidy of $3 for a firm operating in a competitive market. The f

Ethanol Production and Land Use Externalities

Ethanol production can lead to land use externalities, leading to environmental degradation not refl

Fast Fashion and Environmental Degradation

A fast fashion apparel market is experiencing negative externalities due to environmental degradatio

FRQ 1: Production Function and Diminishing Marginal Returns

Firm A uses labor as its variable input in production. The table below shows the output produced by

FRQ 2: Short-Run Cost Analysis

Firm B operates in the short run and has a total cost function given by $$TC(Q) = 100 + 20*Q + 5*Q^2

FRQ 3: Long-Run Production Costs: Economies and Diseconomies of Scale

Company XYZ is reviewing its long-run production costs. The firm’s long-run average total cost (LRAT

FRQ 4: Entry and Exit Decisions – Short Run vs. Long Run

A firm faces a daily fixed cost of $100 and variable costs of $5 per unit produced. Part A: Explain

FRQ 4: Profit Maximization: Equating Marginal Revenue and Marginal Cost

A firm operates in a market where it is a price taker. The firm’s marginal cost (MC) function is giv

FRQ 5: Profit Maximization in Perfect Competition

Firm D faces a market price of $20 and has a total cost function given by $$TC(Q) = 50 + 2*Q^2$$. Us

FRQ 6: Long-Run Production Costs and Economies of Scale

A firm’s long-run average total cost (LRATC) is given by the function: $$LRATC(Q) = 100 + \frac{100

FRQ 6: Profit and Long-Run Equilibrium in Perfect Competition

In a perfectly competitive market, a firm has a total cost function given by $$TC(Q) = 100 + 5 * Q +

FRQ 11: Short Run versus Long Run Decision Analysis

A firm’s short-run total cost function is given by $$TC_{SR}(Q) = 100 + 5*sqrt(Q)$$, while its long-

FRQ 15: Market Adjustments in Perfect Competition

A sudden economic shock has affected the market for Good X in a perfectly competitive industry. The

FRQ 15: The Role of Implicit Costs in Decision-Making

Firms must consider both explicit and implicit costs when evaluating profitability. Part A: Define

FRQ 16: Combined Production and Cost Decision in a Competitive Market

Consider a firm with the production function $$Q = 3*L^{0.5}$$. The firm faces a fixed cost of $100

FRQ 17: Strategic Interactions Using a Payoff Matrix

Two firms in an industry face strategic choices regarding their production levels. The following pay

FRQ 18: Analyzing Returns to Scale

Understanding returns to scale is essential in analyzing long-run production. Part A: Differentiate

FRQ 19: Impact of Increased Wage on Production and Costs

A fast-food chain originally had a variable cost function of $$VC(Q) = 2 * Q + 0.1 * Q^2$$. Due to a

FRQ 20: Integrated Analysis: Production, Cost, and Market Entry in Perfect Competition

A tech startup operating in a perfectly competitive market has a total cost function given by $$TC(Q

Government Intervention: Per‐Unit Tax and Deadweight Loss

A competitive market for Good X is initially in equilibrium at a price $$P_0 = 8$$ and quantity $$Q_

Graph Analysis of Perfect Competition Market Supply and Demand

The following graph represents the market for Good X in a perfectly competitive market. Answer the

Graphing Average and Marginal Cost Curves

Construct a diagram that includes the Average Total Cost (ATC), Average Variable Cost (AVC), and Mar

Graphing Cost Curves and Determining Shutdown Point

A firm’s short-run cost structure is represented by several cost curves. Based on the provided graph

Impact of Factor Input Changes on the Production Function

A firm produces output using both capital and labor. The table below provides data for different com

Long-Run Average Cost Curve and Economies of Scale Analysis

A firm’s long-run average total cost (LRATC) is represented by the following curve. Use the graph an

Long-Run Production Costs: Economies and Diseconomies of Scale

A firm’s long-run average total cost (LRATC) behavior is summarized in the table below: | Output (Q

Managerial Decision-Making: Cost Minimization

Analyze how managerial decisions in the short run lead to cost minimization when some inputs are fix

Marginal Cost and ATC Intersection Analysis

Explain why the marginal cost (MC) curve must intersect the average total cost (ATC) curve at its mi

Marginal Cost and Shutdown Decision

A firm’s total cost function is given by $$TC(Q) = Q^2 + 100$$. With this cost structure, answer the

Mining and Environmental Degradation

Mining activities can cause significant environmental degradation, which is a negative externality n

Multi-Stage Production Decision and Profit Maximization

A firm operates with a total cost function of $$TC(Q) = 5 + 10*Q + Q^2$$. Answer the following quest

Production Function Analysis and Diminishing Marginal Returns

A firm uses labor as its only variable input. The table below shows the firm’s labor input (L) and t

Production Function Analysis and Diminishing Returns

A manufacturing firm produces widgets using labor as its only variable input. The production functio

Profit Maximization in Perfect Competition

A competitive firm faces a market price of $$30$$ per unit. Its marginal cost (MC) function is given

Short-Run Decision and the Shutdown Rule

A firm has a cost function $$TC(Q) = 3*Q^2 + 50$$, where fixed costs are $$50$$. The market price ha

Short-Run Production Cost Analysis: Bakery Cost Curves

A small bakery has fixed costs of $$FC = 50$$ and hires workers at a wage rate of $$w = 15$$ per wor

Technological Improvement and Production Efficiency

A technological improvement shifts the firm’s production function. Prior to the improvement the func

Water Consumption and River Pollution

A market for water-intensive goods is resulting in excessive water use that pollutes local rivers. A

Advertising Effects on Demand Elasticity in Monopolistic Competition

This question examines how advertising influences the price elasticity of demand in monopolistically

Advertising Expenditure and Market Demand Shifts

Examine how advertising expenditures affect the demand curve and market equilibrium in a monopolisti

Analyzing Efficiency Costs of Monopoly Market Power

Market power in a monopoly often leads to efficiency losses. Evaluate these losses by analyzing allo

Case Study: Oligopolistic Collusion and Game Theory

Examine the conditions that lead to collusion in an oligopolistic market and analyze the effectivene

Comparative Welfare Effects of Price Discrimination

A monopolist employing imperfect price discrimination produces different welfare outcomes compared t

Consumer Surplus and Deadweight Loss in Imperfect Competition

Examine the welfare effects of market inefficiencies in imperfect competition.

Cost Curves and Inefficiencies in Imperfect Competition

Explore the role of cost curves in determining output decisions and the resulting inefficiencies in

External Cost in the Pharmaceutical Market

A pharmaceutical company operating in an imperfectly competitive market generates negative externali

FRQ 1: Market Regulation in a Natural Monopoly

Consider a natural monopoly that faces the market demand function $$P = 100 - Q$$ and has a total co

FRQ 10: Third-Degree Price Discrimination in Monopolies

A monopolist serves two separate markets where demand conditions differ. In Market A, the demand fun

FRQ 11: Cost Analysis in Monopolistic Competition

A firm in a monopolistically competitive market faces a fixed cost of $$F = 100$$ and a constant var

FRQ 18: Merger Effects in Oligopolistic Markets

In an oligopolistic industry composed of four firms, a merger takes place resulting in a combined fi

Game Theory in Oligopolies: Prisoner's Dilemma

Analyze the Prisoner’s Dilemma in the context of duopolistic competition and its implications for co

Game Theory in Oligopoly Markets

This question examines strategic interactions among firms in an oligopoly using game theory. Analyze

Government Intervention in Monopoly Markets

Analyze the effects of government-imposed price controls on monopolistic markets.

Government Tax in the Fitness Club Industry

The fitness club industry is experiencing rapid growth in a competitive market environment. The gove

Impact of Advertising in Monopolistic Competition

Examine the role of advertising in shaping demand and profitability in monopolistic competition.

Interdependence in Oligopolistic Markets and the Kinked Demand Curve

Firms in oligopolistic markets are interdependent. Using the kinked demand curve model, analyze how

Long-Run Tax Effects in the Coffee Shops Market

In the coffee shops market, which exhibits characteristics of imperfect competition in the long run,

Marginal Analysis at Deli Delights

Deli Delights, an innovative delicatessen, operates under imperfect competition. It faces a fixed co

Marginal Revenue in Price Discrimination

Examine how marginal revenue is affected under price discrimination scenarios compared to single-pri

Market Dynamics in Monopolistic Competition

Describe the process by which monopolistic competition shifts from short-run profit to long-run norm

Natural Monopoly and Regulation

Examine the characteristics of a natural monopoly and the regulatory measures used to address its in

Negative Environmental Externality in the Textile Industry

A textile firm in an imperfectly competitive market produces fabrics but generates negative external

Negative Externality in a Tech Startup Environment

A rapidly growing tech startup operates in an imperfectly competitive market and faces a negative ex

Negative Externality in Chemical Production

A chemical production firm in an imperfectly competitive market incurs negative externalities due to

Price Discrimination in a Natural Monopoly

Analyze the concept of price discrimination in the context of a natural monopoly. Your answer should

Product Differentiation in Monopolistic Competition

Analyze the role of product differentiation and advertising in a monopolistically competitive market

Production Analysis at Urban Prints

Urban Prints is a small printing business operating in an imperfectly competitive market. The firm h

Profit Maximization in Boutique Bakery

A boutique bakery operates in a market with features of imperfect competition. The bakery incurs a f

Tax Impacts in the Online Streaming Services Market

In the competitive online streaming services market, the government has imposed a $1 per‐unit tax. E

Taxation in a Market with Economies of Scale: High-Tech Gadgets

High-tech gadgets are produced in a market where economies of scale are present, and the competitive

Technological Change and Market Structure in Imperfect Competition

Analyze the impact of technological advancements on the cost structure and entry dynamics in imperfe

Third-Degree Price Discrimination and Welfare Effects

A monopolist can practice third-degree price discrimination by segmenting the market into two groups

Third-Degree Price Discrimination in the Airline Industry

A monopolist in the airline industry practices third-degree price discrimination by segmenting the m

Analysis of Diminishing Marginal Returns

Using production data, analyze diminishing marginal returns and discuss its implications on producti

Analysis of MRP and MFC in Competitive and Monopsonistic Labor Markets

This question examines the relationship between marginal revenue product (MRP) and the marginal fact

Analysis of MRP and MFC in Wage Determination

A firm employs labor where the marginal revenue product (MRP) is given by $$MRP = 100 - 5*L$$ and th

Capital-Labor Substitution and the Least Cost Rule

Using a production function and the least cost rule, determine the optimal input combination under c

Comparative Analysis: Perfect Competition vs. Monopsony

A table below presents data for a competitive labor market and a monopsonistic market. | Scenario

Comparative Statics: Impact of Rising Capital Price on Input Choice

A rise in the price of capital forces a firm to re-evaluate its input combination. Analyze this effe

Derived Demand for Labor: Analyzing MRP and Optimal Hiring

This question examines a firm's derived labor demand based on its marginal revenue product (MRP) fun

Determinants of Labor Supply

Labor supply in a market is influenced by various factors. Consider three determinants: personal val

Determining Labor Market Equilibrium from Supply and Demand Equations

The labor market is represented by the following equations: Supply: $$w = 10 + 0.2*L$$ Demand: $$w =

Disruption in Labor Supply Due to a Natural Disaster

A sudden natural disaster disrupts the local labor market, leading to a temporary leftward shift in

Economies of Scale and Cost Analysis

Evaluate whether a firm is experiencing economies of scale by analyzing its cost data.

Effect of Product Market Shifts on Factor Demand

Changes in the final product market can influence the demand for factors of production. Explore how

Effects of Binding Minimum Wage on Labor Market Dynamics

In a competitive labor market, the government imposes a binding minimum wage above the equilibrium w

Effects of Demographic Changes on Labor Supply

In a regional economy, demographic changes lead to a decrease in the labor supply. Assess the impact

Efficiency Analysis in Factor Markets with Subsidies

The government introduces a per-worker subsidy to stimulate employment in a slow-growing sector. Ana

Equilibrium in Perfectly Competitive Factor Markets

Consider a competitive labor market where firms hire workers until $$MRP = MFC$$. The table below pr

Evaluating Wage Differentiation in Skilled vs. Unskilled Labor Markets

This question analyzes the employment of skilled and unskilled labor using their respective marginal

Externalities in Agriculture: Overuse of Fertilizers

Excessive fertilizer use in agriculture leads to nutrient runoff that damages aquatic ecosystems. An

Factor Market Equilibrium and Derived Demand Analysis

Consider a perfectly competitive labor market in which firms base their hiring decisions on the marg

Factor Market Equilibrium under a Binding Wage Subsidy

This question examines the impact of a government wage subsidy on the equilibrium in the labor marke

Factor Market Equilibrium under Demand and Supply Shifts

A new government policy increases the minimum wage, while at the same time an innovation boosts work

Factor Supply: Impact on Wage Equilibrium

Consider a local labor market where the supply of labor is influenced by factors such as personal va

Globalization and Factor Market Adjustments

Discuss the impact of globalization on domestic factor markets, with a focus on labor demand and wag

Graphical Analysis of Supply and Demand in Factor Markets

Refer to a provided graph of the labor market. Answer the following: (i) Identify and label the lab

Graphing the Effect of a Per-Worker Subsidy in the Labor Market

To promote employment, the government provides a per-worker subsidy of $5 to firms. Evaluate the imp

Impact of a Minimum Wage on the Labor Market: Price Floor Analysis

In a competitive labor market with an initial equilibrium wage of $15 and employment of 100 workers,

Impact of an Influx of Migrant Workers on Labor Supply

A local economy experiences an influx of migrant workers, causing a shift in the labor supply curve.

Impact of Government Intervention on Labor Supply

This question explores how government policies, such as a minimum wage, affect the labor supply in a

Impact of Government Policy on Factor Supply

This question evaluates the effect of a government-imposed minimum wage, which is set above the comp

Impact of Minimum Wage on Factor Markets

In a competitive labor market, assume the initial equilibrium is at a wage of $12 with 200 workers e

Impact of Trade Liberalization on the Derived Demand for Labor in Local Manufacturing

Following trade liberalization, a local manufacturing sector faces reduced product demand, which in

Integrative Analysis: Factor Market Shifts and Firm Profitability

This integrative question examines how changes in technology, government policy, and input prices in

Labor Demand Adjustments in an Agricultural Context

This question explores how external factors (e.g., weather conditions) affect labor demand in an agr

Labor Supply Elasticity and Wage Changes

This question tests your understanding of labor supply elasticity and its implications when wages ch

Least Cost Input Combination

Analyze how the least cost rule guides a firm's decision in combining labor and capital.

Least-Cost Combination and Factor Price Ratio Analysis

This question involves analyzing the optimal combination of inputs by comparing the marginal product

Long-Run Adjustments in Factor Markets due to Entry and Exit

Over the long run, the entry and exit of firms in a product market affect the derived demand for lab

Manufacturing and Community Health

A local manufacturing plant produces goods but its production generates hazardous waste that adverse

Marginal Factor Cost and Derived Demand Calculation

A firm's marginal product of labor is given by $$MPL = 50 - 0.5*Q$$, its product sells at a price of

Marginal Revenue Product Calculation

A manufacturing firm produces gadgets and employs workers whose productivity is shown in the table b

Minimum Wage Effects in Different Market Structures

Evaluate how an imposed minimum wage affects factor markets in both competitive and monopsonistic se

Monopsonistic Labor Market Analysis

Consider a monopsonistic firm operating in the labor market. The table below shows data on the numbe

Monopsony vs Competitive Market Wage Differentiation

Compare the outcomes of a monopsonistic labor market with those of a perfectly competitive labor mar

Negative Externality in Fast Food Production

A fast food chain's production process generates excessive waste that contributes to local pollution

Negative Externality in Mining Operations

A mining firm’s extraction activities generate dust and noise that reduce nearby property values, ge

Profit Maximization in Factor Markets: Equating MRP and MFC

A firm in a perfectly competitive labor market uses labor as an input. Its production function yield

Profit Maximization under Technological Change

This question explores how technological change affects a firm’s production decisions, specifically

Profit-Maximizing Labor in a Competitive Market

A firm in a perfectly competitive labor market is guided by the marginal revenue product (MRP) of la

Short-Run Factor Adjustments and Diminishing Marginal Returns

This question explores how diminishing marginal returns in labor affect a firm’s short-run hiring de

Water Consumption in Beverage Industry

A beverage company uses large quantities of water in its production process, leading to environmenta

Welfare Implications of Monopsonistic Labor Markets

Monopsonistic labor markets often result in inefficiencies compared to competitive markets. Analyze

Allocation of Resources and Social Welfare in a Perfectly Competitive Market

Consider a small market for apples with the demand function $$P = 20 - 0.5*Q$$ and the supply functi

Analyzing Deadweight Loss in Imperfect Markets

Deadweight loss (DWL) measures the inefficiency created by market distortions. Analyze how DWL arise

Analyzing Price Floors and Agricultural Surplus

A government sets a price floor in the agricultural market for corn to support farmers.

Comparing Lump-Sum Taxes and Per Unit Taxes

A firm faces two different types of taxes: a lump-sum tax and a per unit tax.

Computing and Interpreting the Gini Coefficient

Discuss the Gini coefficient as a measure of income inequality. Explain how it is computed and inter

Correcting Monopoly Externalities Through Taxation

A monopolist operates in a market where a negative externality causes the social marginal cost to ex

Correcting Negative Consumption Externalities with Taxes

Analyze the impact of a per-unit tax designed to correct a negative consumption externality in a mar

Correcting Negative Externalities with a Per-Unit Tax

A market for Good X is characterized by a negative production externality. Producers face a private

Dynamic Analysis of Externality Correction over Time

Over time, technological innovations can reduce the external cost associated with a negative externa

Effects of a Per-Unit Tax in a Competitive Market

This FRQ examines the impact of a per-unit tax on a competitive market. Consider how the imposition

Effects of Price Floors on Market Efficiency

Analyze the impact of imposing a price floor in a perfectly competitive market.

Effects of Subsidies on Monopolistic Competition

Government subsidies can influence firm behavior in monopolistic competition by altering cost struct

Evaluating Regulation’s Impact on Market Structure

Examine how non-price regulations, such as environmental standards, can impact market outcomes in a

Evaluating the Role of Antitrust Policy in Promoting Competition

This FRQ assesses the role of antitrust policy in addressing market concentration. A recent merger i

External Cost Assessment: Shifting Curves and Equilibrium

Assess the impact of a negative externality on market equilibrium and determine the corrective tax n

FRQ 4: Market Inefficiency in Monopolistic Competition

Discuss how market power in monopolistic competition can lead to allocative inefficiency and assess

FRQ 9: Progressive Taxation and Income Inequality

Discuss how progressive taxation can reduce income inequality in an economy. Use graphical analysis

FRQ 11: Comparing Taxation and Subsidies for Negative Externalities

Evaluate the effectiveness of taxes versus subsidies in correcting negative externalities. Compare t

FRQ 12: Impact of Price Ceilings on Housing Markets

Analyze how a government-imposed price ceiling affects the housing market. Assess the changes in con

FRQ 16: Taxation in Competitive vs. Monopolistic Markets

Compare the effects of a per unit tax on a perfectly competitive market with those on a monopolistic

FRQ 18: Progressive Tax System and Its Effect on Income Distribution

Evaluate the effect of a progressive tax system on income distribution and overall societal welfare.

FRQ 20: Short-Run Effects of Taxes and Subsidies on Market Equilibrium

Compare and contrast the short-run effects of a per unit tax and a per unit subsidy on a competitive

Government Intervention and Market Power: Effects on Consumer Choice

A dominant firm in an imperfectly competitive market is charging high prices, reducing consumer choi

Government Intervention in a Labor Market: Minimum Wage Effects

This FRQ explores the effects of imposing a minimum wage in a labor market. Using the graph provided

Graphical Analysis of Social Welfare in a Competitive Market with External Costs

This FRQ requires analysis of social welfare in a competitive market where a negative externality ca

Graphical Analysis of Subsidies: Perfectly Competitive vs. Monopolistic Competition

Evaluate the impact of per-unit subsidies on market outcomes in both perfectly competitive and monop

Incorporating External Costs in Private Markets

A firm's production process imposes an external cost that is not reflected in its marginal private c

Market Power and Antitrust Policies

Market power can lead to inefficient market outcomes. Analyze how antitrust policies can improve mar

Measuring Income Inequality: The Lorenz Curve and Gini Coefficient

Analyze income inequality by constructing a Lorenz curve and calculating the Gini coefficient using

Minimum Wage Effects: Labor Market Analysis

Analyze the impact of a government-imposed minimum wage (a price floor in the labor market) using th

Minimum Wage Policy and Labor Market Equilibrium

Analyze the effects of imposing a minimum wage above the market equilibrium on the labor market. Con

Negative Externality in Industrial Factory Emissions

An industrial factory produces goods while emitting pollutants into the air, resulting in a negative

Production Function and Cost Analysis in a Competitive Market

Consider a firm operating in a perfectly competitive market with a fixed cost F = $50 and a wage per

Promoting Positive Externalities with Subsidies

In the market for higher education, positive externalities lead to a divergence between private and

Public Goods and the Free-Rider Problem in National Defense

Public goods like national defense are often underprovided in free markets due to the free‐rider pro

Public vs. Private Goods and the Free Rider Problem

Differentiate between public and private goods and explore the inefficiencies caused by the free rid

Public vs. Private Goods and the Free-Rider Problem

Compare and contrast public and private goods, and analyze the free-rider problem associated with pu

Quantifying Deadweight Loss from a Per-Unit Tax in a Competitive Market

Consider a perfectly competitive market with the following functions: Demand: $$P = 100 - 2*Q$$ and

Regulatory Intervention versus Taxation in Externality Reduction

In some markets, governments can adopt different interventions to address negative externalities. Co

Social Efficiency and Market Outcomes Analysis

Analyze the concept of social efficiency in market outcomes from a perfectly competitive market pers

Social Efficiency in Labor Markets

Analyze the concept of social efficiency in the labor market by discussing how the equilibrium wage

Subsidies to Correct Positive Externalities in Agriculture

Consider an agricultural market where organic farming generates positive externalities (e.g., enviro

Tax Incidence in a Perfectly Competitive Market

A per-unit tax is imposed in a perfectly competitive market. Analyze the impact of this tax on marke

Tax Structures and Income Inequality

Compare how different tax structures (progressive, proportional, and regressive) impact income distr

Understanding Public Goods and the Free Rider Problem

Public goods, such as national defense, tend to be underprovided in a competitive market because of