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Analyzing the Role of Positive and Normative Statements in Policy Debates
Evaluate how positive and normative statements influence policy debates and economic decision-making
Comparative Advantage and Trade
Evaluate how comparative advantage leads to mutually beneficial trade between entities.
Comparative Advantage and Trade Decisions
Evaluate comparative advantage between two countries and discuss potential gains from trade based on
Complex Comparative Analysis: Positive vs. Normative and Ethical Considerations
Critically evaluate a policy proposal by distinguishing between positive and normative economic stat
Consumer Choice Under Budget Constraints
This question examines consumer choice under a budget constraint and the impact of diminishing margi
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
Economic Growth via the Production Possibilities Curve
This question examines economic growth through shifts in the Production Possibilities Curve (PPC).
Economic Models and Marginal Utility Functions
Evaluate the role of economic models in explaining consumer behavior, using a given marginal utility
Economic Systems: Market, Command, and Mixed Economies
Discuss the different types of economic systems, highlighting their characteristics and how they add
Entrepreneurial Decision-Making: Factors of Production and Marginal Analysis
Analyze how entrepreneurs integrate factors of production and marginal analysis to optimize business
Evaluating Consumer and Producer Surplus
This question focuses on understanding and calculating consumer and producer surplus, and analyzing
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
This question focuses on the factors of production and their impact on economic output and productiv
Factors of Production and Economic Growth
This question explores the four factors of production and how changes in these factors can influence
FRQ 1: Scarcity and Opportunity Cost
This question examines the fundamental economic concepts of scarcity and opportunity cost, and asks
FRQ 3: Cost-Benefit Analysis and Decision Making
This question evaluates your understanding of cost-benefit analysis and its importance for decision
FRQ 4: Comparative Advantage and Terms of Trade
This question explores the concepts of absolute advantage, comparative advantage, and how terms of t
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
FRQ 12: Efficiency and Economic Growth via the PPC
This question examines the concepts of productive and allocative efficiency using the Production Pos
Interpreting Costs in a Business Venture
This question deals with the identification and evaluation of implicit and explicit costs in a busin
Managerial Decision-Making and Opportunity Costs
This question explores the role of opportunity cost in managerial decision-making. (a) Define oppor
Marginal Analysis and Diminishing Returns
Apply marginal analysis to determine the point of diminishing marginal utility and discuss its impli
Marginal Product and Diminishing Returns
This question focuses on the concept of marginal product of labor and diminishing returns. Answer ev
Marginal Utility and Consumer Decision-Making
A consumer derives utility from two goods: Food and Clothing. The marginal utilities for the first t
Market Externalities and Government Intervention
This question focuses on analyzing a market with a negative externality, calculating welfare losses,
Micro vs. Macroeconomics Perspectives
This question requires you to contrast the scope and analysis of microeconomics and macroeconomics.
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
Positive vs. Normative Economics
This question explores the differences between positive and normative economic analysis.
Production Possibilities Curve (PPC) Analysis
Analyze the Production Possibilities Curve (PPC) and explain how it represents opportunity costs in
Production Possibilities Curve (PPC) Interpretation
Analyze a production possibilities curve (PPC) to demonstrate understanding of efficient resource al
Resource Allocation in a Mixed Economic System
Evaluate how a mixed economic system handles resource allocation compared to purely market or centra
Supply and Demand: Scarcity and Resource Allocation
Examine how resource scarcity affects market equilibrium and surplus measures using a supply and dem
Trade and Comparative Advantage in a Global Market
This question examines trade benefits driven by comparative advantage. Answer every part using the d
Comparative Analysis of Demand and Supply Elasticities
Compare and contrast the determinants of elasticity for demand and supply, and use numerical data to
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 from Market Interventions
This question examines the concept of deadweight loss (DWL) due to market distortions. Answer the fo
Effects of Subsidies on Supply and Welfare
This question explores how subsidies affect market outcomes. Answer the following: (a) Describe the
Elasticity of Demand Calculation
This question measures your ability to calculate and interpret price elasticity of demand. Answer th
Elasticity of Supply and Total Revenue Impact
A firm observes that its quantity supplied changes as the market price shifts. Analyze how supply el
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 1: Demand Shifts Analysis in the Smartphone Market
In the premium smartphone market, an increase in consumer income has led to a rise in demand. Firms
FRQ 4: Calculating Price Elasticity of Demand and its Impact on Total Revenue
A local restaurant charges $10 for a specific dish and sells 100 plates per day. After reducing the
FRQ 5: Consumer and Producer Surplus Calculation
Consider a market where the demand function is $$D: P = 200 - 2*Q$$ and the supply function is $$S:
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: 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 14: Long-Run Adjustments in Perfect Competition
A perfectly competitive market initially experiences short-run economic profits. Over time, new firm
FRQ 15: Effects of Changing Consumer Tastes on the Sneaker Market
A viral social media campaign has dramatically increased the popularity of a particular brand of sne
FRQ 15: Short-Run vs Long-Run Supply Elasticities
Consider a market where the production of a commodity is difficult to adjust in the short-run but ea
FRQ 19: Effects of Import Quotas in International Trade
A country imposes an import quota on automobiles to protect domestic producers. The domestic market
Government Intervention: Price Ceilings and Their Consequences
This question explores how price ceilings affect market outcomes by altering consumer and producer s
Impact of a Price Ceiling during a Pandemic in the Fast Food Market
During a pandemic, a government imposes a price ceiling of $8 on fast food to protect consumers, low
Impact of a Price Floor on Market Outcomes
A government imposes a price floor in a market that is initially in equilibrium. Answer the followin
Impact of Price Ceilings on Markets
This question focuses on the effects of price ceilings. Answer the following: (a) Define what a pri
Impact of Technological Advancement on Supply
This question focuses on how technological changes affect market supply. Answer the following: (a)
Implications of a Price Floor in the Electronic Goods Market
In the market for electronic goods, equilibrium occurs at $350 for 2,000 units. A price floor is set
Income Effect on Demand for Normal and Inferior Goods
Analyze how changes in consumer income affect the demand for normal and inferior goods.
Income Elasticity and Good Classification
Income elasticity of demand measures how quantity demanded changes in response to changes in consume
Industrial Pollution in the Chemical Market
A chemical plant produces products in a competitive market, but its production process emits polluta
International Trade: Tariffs and Quotas Impact
This question requires an analysis of government policies on international trade and their effects o
Manufacturing Emissions and Public Health
A manufacturing plant emits pollutants that have adverse effects on local public health. The market
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 and Adjustment Mechanisms
This question examines the concept of market disequilibrium and how markets adjust to eliminate shor
Market Effects of Advertising
A major advertising campaign is launched for a product, which is expected to influence consumer beha
Noise Pollution in the Outdoor Concert Market
Outdoor concerts generate noise that negatively affects nearby residents. In this market, the equili
Price Elasticity of Demand Analysis – Calculation and Interpretation
This FRQ assesses a firm's pricing strategy using elasticity measures. Answer the following parts us
Price Elasticity of Demand Calculations
This question requires you to calculate the price elasticity of demand using the midpoint formula, i
Price Elasticity of Supply and Its Implications
This question explores the concept of price elasticity of supply. You are asked to calculate it usin
Price Elasticity of Supply: Practical Applications
A farm report indicates that when the price of corn increases from $$\$4$$ to $$\$5$$ per bushel, th
Price Elasticity vs. Income Elasticity Comparison
This question requires you to compare and contrast price elasticity of demand and income elasticity
Short-run vs Long-run Supply Elasticity Analysis
Differentiate between short-run and long-run supply elasticities and illustrate these differences wi
Supply Shift: Impact of Technology on Production
A technological innovation reduces production costs for suppliers in the market for Product Y. Analy
Tax Incidence and Deadweight Loss in a Competitive Market
Consider a market with demand $$P = 90 - Q$$ and supply $$P = 30 + Q$$. A tax of $$\$10$$ per unit i
Waste Management in the Fast Food Industry
The fast food industry generates substantial waste, creating a negative externality for local commun
Accounting vs. Economic Profit Analysis
A restaurant owner operates in a competitive market and, over a month, earns a total revenue of $200
Air Travel and Noise Pollution
Air travel contributes to noise pollution which represents a negative externality affecting communit
Automobile Emissions in Urban Areas
Urban areas are facing high levels of air pollution due to automobile emissions. Consider the market
Break-even Analysis and Cost Function
Consider a firm with the cost function $$TC(Q) = 5*Q^2 + 100$$ and that sells its product at a price
Construction and Urban Dust Pollution
Construction activities in urban areas can cause dust pollution, which is a negative externality. An
Cost Curve Analysis and Graph Interpretation
A firm’s cost structure is illustrated in the graph provided. The graph displays the Marginal Cost (
Data Center Services and Energy Consumption Externality
Large data centers contribute to increased energy consumption, causing negative externalities that a
Deriving the Firm's Supply Curve from its MC Curve
Demonstrate how a firm's marginal cost (MC) curve forms the basis for its supply curve in a perfectl
Fossil Fuel Energy Production and Pollution
Fossil fuel energy production has substantial negative externalities due to air pollution. Analyze t
FRQ 1: Production Function and Diminishing Marginal Returns
Firm A uses labor as its variable input in production. The table below shows the output produced by
FRQ 1: Production Function and Diminishing Marginal Returns Analysis
A company uses labor as its only variable input in the production process. The table below shows the
FRQ 2: Short-Run Cost Analysis
Firm B operates in the short run and has a total cost function given by $$TC(Q) = 100 + 20*Q + 5*Q^2
FRQ 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 6: Profit and Long-Run Equilibrium in Perfect Competition
In a perfectly competitive market, a firm has a total cost function given by $$TC(Q) = 100 + 5 * Q +
FRQ 6: Shutdown Analysis in Perfect Competition
A firm has fixed costs of $80 and a variable cost function given by $$VC(Q) = 4*Q + Q^2$$. The marke
FRQ 7: Accounting vs. Economic Profit Analysis
A restaurant owner reports total revenue of $1000. The explicit costs incurred are $700, and the imp
FRQ 11: Short-Run vs. Long-Run Production Decisions
A firm operates with a total cost function given by $$TC(Q) = 50 + 6 * Q + 0.5 * Q^2$$. Due to a dro
FRQ 12: Labor Productivity and Marginal Product Analysis
A technology firm employs software developers to fix bugs in its code. The following table shows the
FRQ 13: Cost Structure and Profit Maximization in a Bakery
A bakery has a fixed cost of $300 and a variable cost function given by $$VC(Q) = 2 * Q + 0.5 * Q^2$
FRQ 13: Marginal Analysis and Profit Maximization
A firm has a total cost function represented by $$TC(Q) = 40 + 6*Q + 2*Q^2$$ and operates in a marke
FRQ 17: Strategic Interactions Using a Payoff Matrix
Two firms in an industry face strategic choices regarding their production levels. The following pay
Impact of Technological Change on Production and Costs
A firm adopts new technology that alters its production process. Below are two production tables: on
Long-Run Equilibrium and Normal Profit in Perfect Competition
Analyze how firms in a perfectly competitive market achieve long-run equilibrium with normal profit.
Long-Run Production Costs and Scale Economies
A firm’s long-run average total cost (LRATC) data over various output levels is shown in the table b
Marginal Cost and Marginal Product Relationship
A manufacturing firm has a marginal product of labor (MPL) given by the function $$MPL = 30 - 2*L$$
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
Marginal Product Calculation in Production
Compute the marginal product of labor (MPL) using the data provided and discuss the occurrence of di
Market Supply Determination from Firm‐Level Cost Functions
In a perfectly competitive market, the market supply curve is derived from the aggregation of indivi
Multi-stage Production Decision Analysis
A firm operates with capital fixed in the short run and uses labor as a variable input. The followin
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 Decisions Under Government Subsidies
A government subsidy of $$S = 2$$ per unit is provided to a firm whose original cost function is $$T
Production Function Analysis and Diminishing Marginal Returns
A firm uses labor as its only variable input. The table below shows the firm’s labor input (L) and t
Profit Types and Profit Maximization
A firm sells its product at $$50$$ per unit. In a given period, the firm incurs explicit costs of $$
Role of Implicit Costs in Economic Decision-Making
A consultant leaves a job with an annual salary of $80,000 to start his own firm. The firm’s explici
Short-Run vs. Long-Run Cost Curves Comparative Analysis
A firm has several short-run average total cost (ATC) curves corresponding to different plant sizes.
Short-Run vs. Long-Run Strategic Decisions in Perfect Competition
A firm in a perfectly competitive market faces a short-run total cost function of $$TC = 200 + 10*Q
Telecommunications and Electromagnetic Pollution
The production of telecommunications equipment can generate electromagnetic pollution, a negative ex
Advertising and Strategic Interaction in Oligopoly
Examine the role of advertising in shaping competitive interactions among firms in an oligopolistic
Analyzing Returns in Eco-Friendly Furniture
An eco-friendly furniture maker operates in an imperfectly competitive market. The firm has a fixed
Assessing Cost Structures in Handmade Jewelry
A handmade jewelry business operates in an imperfectly competitive market. The firm has a fixed cost
Barriers to Entry and Market Structure Dynamics
Discuss the role of barriers to entry in shaping market structures. Use real-world examples where ap
Cartels and Collusive Behavior in Oligopoly
Evaluate the dynamics of collusive behavior in oligopolistic markets, focusing on cartel formation a
Comparative Efficiency in Monopolistic Competition vs. Monopoly
Compare the efficiency outcomes in a monopolistic competition market and a pure monopoly.
Cost Analysis in a Monopoly: Production Decisions Using MC and ATC
This question requires you to analyze a monopolist's cost structure, determine the profit-maximizing
Cost Analysis in Boutique Electronics
A boutique electronics firm operates under imperfect competition. The firm has a fixed cost of $900,
Cost and Revenue Analysis in Monopolistic Competition
Analyze the cost and revenue structure of a firm in monopolistic competition.
Cost Curves and Inefficiencies in Imperfect Competition
Explore the role of cost curves in determining output decisions and the resulting inefficiencies in
Determining Diminishing Returns in Tech Gadgets
Tech Gadgets Inc. produces electronic devices in a market with some degree of imperfect competition.
Dominant Strategy and Nash Equilibrium in Oligopoly
Analyze a strategic decision scenario in an oligopolistic market using game theory.
Environmental Tax in the Car Manufacturing Market
To combat environmental pollution, the government has imposed a $3 per‐unit environmental tax on car
External Cost in the Pharmaceutical Market
A pharmaceutical company operating in an imperfectly competitive market generates negative externali
FRQ 8: Regulatory Intervention in Monopolies
A monopolist operates in a market where the demand function is given by $$P = 150 - Q$$ and the marg
FRQ 9: Price Cap Regulation in a Natural Monopoly
A natural monopoly has a total cost function $$TC = 200 + 20*Q$$ and faces the demand function $$P =
Game Theory and Collusion in an Oligopoly
Consider an oligopolistic market where two firms are deciding whether to "Cooperate" (maintain high
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: Dominant Strategies and Nash Equilibrium
Consider an oligopolistic market where Firms A and B have the following payoff matrix (values repres
Game Theory in Oligopoly: Dominant Strategy and Nash Equilibrium
Consider a duopoly where each firm must choose between cooperating or competing. Use game theory to
Government Tax in the Fitness Club Industry
The fitness club industry is experiencing rapid growth in a competitive market environment. The gove
Government Tax on Fast Food Items
Fast food markets operate under competitive conditions despite some imperfect information. A governm
Labor and Production at Gourmet Coffee
Gourmet Coffee operates in a market with imperfect competition. The business has a fixed cost of $15
Market Concentration and Collusion in Oligopolies
Market concentration in oligopolistic industries can lead to collusion. Analyze how high market conc
Market Structures and Innovation: Role of Economies of Scale
Analyze how economies of scale contribute to the formation of natural monopolies and discuss policy
Monopoly Profit Maximization and Deadweight Loss Analysis
In this question, you will analyze how a monopolist maximizes profit, the concepts of allocative and
Monopoly Regulation and Natural Monopoly Pricing
Consider a natural monopoly with high fixed costs that initially produces at the profit‐maximizing o
Natural Monopoly and Regulation
Discuss the characteristics of a natural monopoly and evaluate the impact of government regulation o
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 Chemical Production
A chemical production firm in an imperfectly competitive market incurs negative externalities due to
Optimizing Input Use in Digital Printing
Digital Print Co. operates in an imperfectly competitive market where it produces digital prints. Th
Price Discrimination and Deadweight Loss
A monopolist that charges a single uniform price faces deadweight loss due to higher pricing. Now su
Price Discrimination Strategies in Imperfectly Competitive Markets
This question focuses on price discrimination in monopoly settings. You will explain the differences
Production Analysis at Urban Prints
Urban Prints is a small printing business operating in an imperfectly competitive market. The firm h
Short-run and Long-run Outcomes in Monopolistic Competition
A firm operating in a monopolistically competitive industry experiences short-run profits due to a d
Shutdown Decisions in Imperfectly Competitive Firms
This question examines the concept of the shutdown point in the short run, using cost data to determ
Strategic Interaction in Oligopoly
Two firms in an oligopolistic market must choose between two strategies: 'High' and 'Low' pricing. T
Strategic Pricing in Price Discrimination Scenarios
Evaluate a firm's strategic pricing decisions when engaging in price discrimination across different
Tax Effects in a Regional Housing Market
In a regional housing market characterized by elements of imperfect competition, the government impo
Tax Impact on Eco-Friendly Products Market
In the market for eco-friendly products, growing environmental concerns have prompted the government
Taxation and Innovation in Telecommunications
In the telecommunications market, rapid innovation is key. A $4 per‐unit tax is imposed on firms in
Taxation and Network Effects in the Video Game Consoles Market
The video game consoles market exhibits significant network effects. The government has imposed a $1
The Role of Advertising in Monopolistic Competition
Discuss the influence of advertising on market demand and firm profitability in monopolistic competi
Adjustment in Factor Demand Due to a Product Demand Shock
A firm experiences a downward shock in product demand causing the product price to fall from $30 to
Air Pollution from Cement Production
A cement production firm generates air pollution that is not reflected in its production costs, resu
Analysis of Monopsony: Wage Determination and Employment
In a monopsonistic labor market, a single employer has the power to set wages. Consider the followin
Basic Factor Market Hiring Decision: MRP and Wage Comparison
A firm in a perfectly competitive labor market is evaluating its hiring decision. The marginal produ
Comparative Analysis of Labor and Capital Markets
A firm must decide between hiring additional labor or investing in capital. Consider that product de
Comparative Analysis of Perfect Competition and Monopsony in Labor Markets
Consider two labor market scenarios. In a perfectly competitive market, the equilibrium wage is $$w
Comparing Subsidies and Price Controls in Labor Markets
A government is evaluating two policies to increase employment from 100 to 130 workers: a per-worker
Cost Minimization and Factor Substitution in Production
This question involves applying the least cost rule to determine the optimal combination of labor an
Cost Minimization and the Least Cost Rule
A firm aims to minimize production costs while maintaining its output level by choosing the optimal
Derived Demand and Labor Hiring Decision in Perfect Competition
A firm, Timber Furniture Company, produces handcrafted furniture using labor as a key input. The mar
Derived Demand and Marginal Revenue Product
A firm operates in a perfectly competitive product market where the product sells at $20 per unit. T
Derived Demand and Marginal Revenue Product Calculation
A firm's marginal product of labor (MPL) is given by $$MPL(Q) = 100 - 2*Q$$ and its product sells at
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
Derived Demand Impact from Product Market Conditions
A decline in product market prices can negatively affect the derived demand for labor. Suppose initi
Economies of Scale and Factor Demand
This question explores how economies of scale, which reduce average production costs as output incre
Effects of Changing Factor Prices on Cost Structure
A firm operating in a perfectly competitive labor market faces a constant wage rate. Suppose the wag
Effects of Universal Basic Income on Labor Supply
A government introduces a universal basic income (UBI), which provides a fixed income to all citizen
Elasticity of Labor Supply
Using data provided on wage rates and labor supply, calculate the elasticity of labor supply and int
Enhanced Productivity Through Training
A firm initiates a training program which successfully increases the marginal product of labor. Befo
Evaluating Factor Markets Under Uncertainty
This question examines how uncertainty regarding future product demand affects a firm's hiring decis
Evaluating Wage Differentiation in Skilled vs. Unskilled Labor Markets
This question analyzes the employment of skilled and unskilled labor using their respective marginal
Factor Market Dynamics in an Economic Downturn
Analyze how an economic downturn impacts factor markets, focusing on shifts in demand for labor and
Factor Supply Shifts: Effects on Employment and Wages
This question evaluates the impact of an increase in labor supply, due to a rise in the number of qu
Firm Size, Economies of Scale, and Factor Demand
Large firms experiencing economies of scale may demand factors of production differently compared to
Government Intervention in Factor Markets
This question evaluates the effects of government intervention in labor markets and its impact on ma
Government Intervention in Labor Markets
Evaluate the impact of government intervention in labor markets through subsidies and analyze their
Government Intervention: Tax on Hiring in Labor Markets
The government imposes a per-worker tax of $4 on firms in a competitive labor market. Analyze how th
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 a Wage Subsidy on Factor Market Outcomes
The government introduces a wage subsidy for low-income workers, effectively reducing the cost of la
Impact of Government Subsidy on Labor Market Dynamics
A government subsidy for worker training increases worker productivity, thereby affecting the derive
Impact of Input Price Change on Factor Demand
A firm initially pays $30 per unit for labor and $50 per unit for capital. If the wage rate increase
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
International Trade and Factor Demand
A firm that primarily served the domestic market begins exporting, increasing the overall demand for
Labor Demand Response
A firm’s initial marginal product of labor is 25 units and its product sells for $10 each. A new sof
Labor Supply and Demand in Competitive Markets
Consider a competitive labor market. Analyze the market equilibrium and the effects of a binding min
Labour Supply Elasticity and Worker Response Analysis
Consider the following labor market data: | Wage ($) | Labor Supplied (workers) | |----------|------
Least Cost Input Mix Determination
A firm uses labor and capital to produce output with marginal products given by $$MPL = 40 - 2*L$$ a
Marginal Analysis and Short-run Hiring Decisions
A firm faces diminishing marginal returns with a marginal product of labor described by $$MPL(L) = 2
Marginal Factor Cost Determination in a Monopsony
A monopsonistic firm has a labor supply function given by $$w = 5 + 0.4*L$$. The firm must determine
Marginal Revenue Product Calculation
A manufacturing firm produces gadgets and employs workers whose productivity is shown in the table b
MC, ATC, and MR in Factor Markets
Consider a firm operating in a perfectly competitive labor market. The firm’s cost structure is repr
Minimum Wage Effects in Competitive and Monopsonistic Markets
Analyze the effects of imposing a binding minimum wage on employment in both competitive and monopso
Negative Externalities in Tech Manufacturing
A semiconductor manufacturing plant generates hazardous waste that contaminates local water supplies
Optimal Factor Combination under Budget Constraints
A firm produces output using labor and capital according to the production function $$Q = 2*L^{0.4}*
Overextraction of Water Resources for Agriculture
In a region with intensive agriculture, water is extracted from a common source. This overextraction
Profit Maximization under Technological Change
This question explores how technological change affects a firm’s production decisions, specifically
Returns to Scale and Labor Demand
This question explores the relationship between returns to scale and the marginal revenue product of
Short-run vs. Long-run Factor Market Decisions
Analyze the differences between a firm's short-run and long-run cost structures and factor market de
Technological Change and Factor Demand
A technological innovation increases labor productivity in a manufacturing firm. Analyze the impact
Understanding Factor Markets and Derived Demand
Define 'Factor Markets' and 'Derived Demand'. (a) Provide concise definitions for each term. (b) Ill
Allocative Efficiency and Deadweight Loss
Using a market for Good X, analyze the conditions for social efficiency and identify any inefficienc
Allocative Efficiency and Market Outcomes in a Competitive Market
Consider a market for Good X operating under perfect competition. Allocative efficiency is achieved
Analyzing Price Floors and Agricultural Surplus
A government sets a price floor in the agricultural market for corn to support farmers.
Analyzing the Impact of Subsidies on Equilibrium in a Monopolistically Competitive Market
This FRQ investigates the effect of a per-unit subsidy on equilibrium outcomes in a monopolistically
Carbon Tax and Environmental Externalities
This FRQ analyzes how a carbon tax can correct the market failure from negative environmental extern
Comparing Price Control and Subsidy Interventions in the Coffee Market
In the coffee market, a binding price ceiling is imposed to protect consumers from high prices. Alte
Comparing Private and Social Costs in Externalities
Examine the difference between private cost (MPC) and social cost (MSC) in the presence of externali
Computing and Interpreting the Gini Coefficient
Discuss the Gini coefficient as a measure of income inequality. Explain how it is computed and inter
Correcting Negative Externalities Through Taxation
A production process in a market generates a negative externality. The private cost to the firm is l
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
Economic Efficiency vs. Equity: Trade-Offs in Progressive Taxation
Progressive taxation is used to redistribute income and address inequality, but it may also lead to
Effects of Subsidies on Monopolistic Competition
Government subsidies can influence firm behavior in monopolistic competition by altering cost struct
Environmental Regulations and Emission Standards
Examine how environmental regulations can be used to correct market failures due to negative externa
Evaluating Non-Price Regulation: Impact on Market Outcomes
This FRQ evaluates the effect of non-price government regulations on market outcomes. A case study d
Evaluating Public Goods Provision: Efficiency and Government Intervention
Discuss the challenges associated with the provision of public goods and how government intervention
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
FRQ 2: Evaluating Government Intervention for a Negative Externality
Examine a market for Widgets that exhibits a negative externality. In this scenario, the marginal pr
FRQ 4: Market Inefficiency in Monopolistic Competition
Discuss how market power in monopolistic competition can lead to allocative inefficiency and assess
FRQ 17: Anti-Trust Policies and Market Efficiency
Analyze how anti-trust policies can improve market efficiency by reducing market power.
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.
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
Market Dysfunction Due to Asymmetric Information: The 'Lemons' Problem
This FRQ examines how asymmetric information can lead to market failure, using the 'lemons' problem
Market Power, Monopolies, and Antitrust Policy
Consider a monopolistic firm operating in the market for Good Z, where its market power leads to dev
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 Externalities and Optimal Taxation
Explain how a negative externality can lead to market inefficiency and welfare loss. Analyze how a p
Negative Externality in Industrial Factory Emissions
An industrial factory produces goods while emitting pollutants into the air, resulting in a negative
Per Unit Tax in Perfect Competition vs. Monopolistic Market
Examine the effects of a per unit tax in both a perfectly competitive market and a monopolistic mark
Positive Externality in Renewable Energy Investment
Investment in renewable energy not only reduces fossil fuel use but also provides broad environmenta
Price Ceiling Impact on a Competitive Market
Consider a perfectly competitive market where the supply function is given by $$P = 25 + Q$$ and the
Promoting Positive Externalities with Subsidies
In the market for higher education, positive externalities lead to a divergence between private and
Public Goods and the Free-Rider Problem in National Defense
Public goods like national defense are often underprovided in free markets due to the free‐rider pro
Public Goods Provision and the Free-Rider Problem
This FRQ explores why public goods are underprovided in a free market and the role of the free-rider
Social Efficiency and Market Outcomes Analysis
Analyze the concept of social efficiency in market outcomes from a perfectly competitive market pers
Social Efficiency in Labor Markets
Analyze the concept of social efficiency in the labor market by discussing how the equilibrium wage
Subsidies and Cost Structure in Perfect Competition
Consider a perfectly competitive firm with a total cost function: $$TC(Q) = 50 + 10*Q + 2*Q^2$$. The
Subsidizing Renewable Energy: Impact on Market Equilibrium
Focus on the renewable energy market, where demand is given by $$P = 150 - 2*Q$$ and supply is given
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
The Effects of a Price Floor in the Labor Market
Examine how a binding price floor affects a labor market. Assume the labor market is initially in eq
The Impact of Minimum Wage Laws on Employment and Inequality
Analyze the effects of a binding minimum wage on the labor market for low-skilled workers. Assume th
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