microeconomics EXAM A+ GRADE ASSURED COMPLETE SOLUTIONS AND VERIFIED ANSWERS

EXAM

Exam Solution
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AP Microeconomics Exam Review 2026 A+ GRADE ASSU
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RED COMPLETE SOLUTIONS AND VERIFIED ANSWERS (
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51F28)




QUESTION 1 ga




Factors of Productionga ga




ANSWER

Labor, Land, Capital, Entrepreneurial ability
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QUESTION 2 ga




Entrepreneurial Ability ga




ANSWER

The effort and know how to put the other resources (Factors of Production) together in a productive v
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enture



QUESTION 3 ga




Trade-offs
ANSWER

The fact that we are faced with scarce resources implies that individuals, firms, and governments are c
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onstantly faced with trade-offs
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QUESTION 4 ga




Marginal
ANSWER

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




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 ga




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 slope
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measures the opportunity cost of the good on the y axis
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QUESTION 7 ga




Shape of a realistic PPFga ga ga ga




ANSWER

Concave or bowed outward ga ga ga




QUESTION 8 ga




Substitute Goods ga




ANSWER

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




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 for th
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e complement good Y increases (decreases)
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QUESTION 10 ga




Taxes and Subsidies ga ga

, ANSWER

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




Simultaneous Changes in Demand and Supply ga ga ga ga ga




ANSWER

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




Consumer Surplus on the Graph ga ga ga ga




ANSWER

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




Producer Surplus on the Graph ga ga ga ga




ANSWER

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




Price Elasticity Formula
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ANSWER

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




A good is price elastic if...
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ANSWER

If Ed > 1
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QUESTION 16 ga