microeconomics EXAM A+ GRADE ASSURED COMPLETE SOLUTIONS AND VERIFIED ANSWERS

EXAM

Exam Solution ms




AP Microeconomics Exam Review 2026 A+ GRADE ASS
ms ms ms ms ms ms ms




URED COMPLETE SOLUTIONS AND VERIFIED ANSWERS
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(5B8C6)
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QUESTION 1 ms




Factors of Production ms ms




ANSWER

Labor, Land, Capital, Entrepreneurial ability
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QUESTION 2 ms




Entrepreneurial Ability ms




ANSWER

The effort and know how to put the other resources (Factors of Production) together in a productiv
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e venture
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QUESTION 3 ms




Trade-offs
ANSWER

The fact that we are faced with scarce resources implies that individuals, firms, and governments ar
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e constantly faced with trade-offs
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QUESTION 4 ms




Marginal
ANSWER

"the next one" or "additional" or "incremental"
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,QUESTION 5 ms




Points outside of the Production Possibilities Curve
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ANSWER

Any point outside the frontier is currently unattainable
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QUESTION 6 ms




The slope of the PPF
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ANSWER

The slope of the curve measures the opportunity cost of the good on the x axis The inverse of the s
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lope measures the opportunity cost of the good on the y axis
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QUESTION 7 ms




Shape of a realistic PPF ms ms ms ms




ANSWER

Concave or bowed outward ms ms ms




QUESTION 8 ms




Substitute Goods ms




ANSWER

Two goods are substitute goods if the consumer can use either to satisfy the same essential function
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, therefore experiencing the same degree of happiness (utility)
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QUESTION 9 ms




Price of Complementary Goods
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ANSWER

If any two goods are compliments and the price of one good X falls (rises), the consumer demand fo
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r the complement good Y increases (decreases)
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QUESTION 10 ms




Taxes and Subsidies ms ms

, ANSWER

A per unit tax is treated by firms as an additional cost of production and would therefore decrease
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the supply cure, or shift it leftward A per unit subsidy lowers the per unit cost of production and th
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erefore shifts the supply curve rightward
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QUESTION 11 ms




Simultaneous Changes in Demand and Supply ms ms ms ms ms




ANSWER

When both demand and supply are changing, one of the equilibrium outcomes (price or quantity) is
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predictable and one is indeterminant
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QUESTION 12 ms




Consumer Surplus on the Graph ms ms ms ms




ANSWER

The area under the demand curve and above the market price is equal to total consumer surplus
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QUESTION 13 ms




Producer Surplus on the Graph ms ms ms ms




ANSWER

The area above the supply curve and below the market price is equal to total producer surplus
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QUESTION 14 ms




Price Elasticity Formula
ms ms




ANSWER

Ed= (%change in quantity demanded of good X)/(%change in the price of good X)
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QUESTION 15 ms




A good is price elastic if...
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ANSWER

If Ed > 1
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QUESTION 16 ms