The visual guide to
AP® Microeconomics
6 units, 114 topics. Each topic is explained in writing, drawn as a lesson you can watch, and checked with practice questions.
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Each unit is as wide as its share of the exam's multiple-choice section.Filled: topics you've opened.
Unit 1Basic Economic Concepts
- Scarcity and the Factors of Production
- The Three Economic Questions
- Command, Market, and Mixed Economies
- Drawing the Production Possibilities Curve
- Opportunity Cost and the Shape of the PPC
- Efficient, Inefficient, and Unattainable Points
- Shifting the PPC and Economic Growth
- Absolute and Comparative Advantage
- Output Problems and Input Problems
- Terms of Trade and the Gains from Trade
- Explicit Costs, Implicit Costs, and Opportunity Cost
- Total Benefit, Total Cost, and Net Benefit
- Diminishing Marginal Utility
- The Utility-Maximizing Rule
- Marginal Analysis and Sunk Costs
Unit 2Supply and Demand
- The Law of Demand
- The Income and Substitution Effects
- What Shifts the Demand Curve
- Shifting a Curve Versus Moving Along It
- The Law of Supply
- What Shifts the Supply Curve
- Measuring Price Elasticity of Demand
- Elastic, Inelastic, and Unit Elastic Demand
- Elasticity Along a Linear Demand Curve
- What Makes Demand Elastic or Inelastic
- Elasticity and Total Revenue
- Price Elasticity of Supply
- Income Elasticity: Normal and Inferior Goods
- Cross-Price Elasticity: Substitutes and Complements
- Market Equilibrium and Market Clearing
- Consumer Surplus
- Producer Surplus and Total Economic Surplus
- Shortages, Surpluses, and the Return to Equilibrium
- Shifts and the New Equilibrium
- Double Shifts and Indeterminate Outcomes
- Price Ceilings
- Price Floors
- Per-Unit Taxes and the Tax Wedge
- Tax Incidence and Elasticity
- Subsidies in a Competitive Market
- World Price, Imports, and Exports
- Tariffs and Quotas
Unit 3Production, Cost, and the Perfect Competition Model
- Inputs, Outputs, and the Production Function
- Total, Marginal, and Average Product
- Diminishing Marginal Returns
- Fixed Costs, Variable Costs, and Total Cost
- Marginal Cost and Where It Comes From
- Average Fixed, Average Variable, and Average Total Cost
- Why Marginal Cost Cuts Average Cost at Its Minimum
- Building a Cost Table from a Production Function
- The Long-Run Average Total Cost Curve
- Economies and Diseconomies of Scale
- Returns to Scale Versus Diminishing Returns
- Minimum Efficient Scale and Market Structure
- Accounting Profit Versus Economic Profit
- Normal Profit and Zero Economic Profit
- The MR Equals MC Rule
- Finding Profit-Maximizing Output from a Table
- Measuring Profit as a Rectangle on the Graph
- The Shutdown Rule
- The Break-Even Point and Long-Run Entry and Exit
- The Firm's Short-Run Supply Curve
- What Makes a Market Perfectly Competitive
- The Price Taker's Flat Demand Curve
- The Market Graph and the Firm Graph Side by Side
- Short-Run Profit and Loss in Perfect Competition
- Long-Run Equilibrium and Zero Economic Profit
- Allocative and Productive Efficiency
- Constant, Increasing, and Decreasing Cost Industries
Unit 4Imperfect Competition
- The Four Market Structures Side by Side
- Barriers to Entry and Market Power
- Why Price Exceeds Marginal Cost
- Why a Monopolist's MR Lies Below Demand
- Finding the Monopoly Price and Quantity
- Monopoly Profit and Deadweight Loss
- Natural Monopoly
- Why a Monopolist Avoids the Inelastic Range
- What Price Discrimination Requires
- Perfect Price Discrimination
- Product Differentiation and a Downward-Sloping Demand Curve
- Short-Run Profit and Long-Run Entry
- Excess Capacity and Allocative Inefficiency
- Interdependence in an Oligopoly
- Reading a Payoff Matrix
- Dominant Strategies and Nash Equilibrium
- The Prisoner's Dilemma and Why Cartels Break
Unit 5Factor Markets
- What a Factor Market Is
- Why Labor Demand Is Derived Demand
- The Marginal Revenue Product of Labor
- The Supply of Labor
- What Shifts Labor Demand
- What Shifts Labor Supply
- Hiring Where MRP Equals the Wage
- The Labor Market and the Firm Side by Side
- The Least-Cost Rule and the Profit-Maximizing Input Rule
- What Makes a Labor Market Monopsonistic
- Why MRC Lies Above the Labor Supply Curve
- The Monopsony Wage, Quantity, and a Minimum Wage
Unit 6Market Failure and the Role of Government
- The Socially Efficient Quantity
- Deadweight Loss from Any Inefficient Quantity
- The Sources of Market Failure
- Asymmetric Information
- Negative Externalities
- Positive Externalities
- Correcting an Externality with a Tax or Subsidy
- Property Rights and Private Bargaining
- Rival and Excludable: the Four Kinds of Goods
- Public Goods and the Free-Rider Problem
- Common Resources and Overuse
- Regulating a Natural Monopoly
- Per-Unit Versus Lump-Sum Taxes on a Firm
- Price Controls and Antitrust in Imperfect Markets
- The Lorenz Curve and the Gini Coefficient
- Sources of Income and Wealth Inequality