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 Trade

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

Comparative Advantage and Trade

This question explores the concepts of absolute advantage, comparative advantage, and the benefits o

Comparative Advantage and Trade Decision

Analyze comparative advantage using given production data for two countries and discuss the gains fr

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 in Business Decisions

Analyze how cost-benefit analysis, including both explicit and implicit costs, informs business deci

Cost-Benefit Analysis in Decision-Making

This question focuses on cost-benefit analysis by distinguishing between explicit and implicit costs

Economic Systems and Resource Allocation

This question asks you to compare different economic systems and analyze how each allocates resource

Economic Systems and Resource Allocation

Analyze different economic systems and their approaches to resource allocation.

Evaluating Consumer and Producer Surplus

This question focuses on understanding and calculating consumer and producer surplus, and analyzing

Evaluating Efficiency in an Economy

An economy is operating on its Production Possibilities Frontier (PPC), yet evidence suggests that t

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: Their Roles in the Economy

This question explores the factors of production and their importance. Be sure to answer all parts.

FRQ 1: Scarcity and Opportunity Cost

This question examines the fundamental economic concepts of scarcity and opportunity cost, and asks

FRQ 4: Comparative Advantage and Terms of Trade

This question explores the concepts of absolute advantage, comparative advantage, and how terms of t

FRQ 13: Market Failures – Externalities and Public Goods

This question explores market failures by examining negative externalities and the provision of publ

FRQ 14: Government Intervention in Mixed Economies

This question examines how governments can intervene in a mixed economic system to improve resource

FRQ 20: Competitive Market Analysis – Cost Curves and Zero Economic Profit

This question integrates multiple concepts by examining a firm's decision-making process in a perfec

Graphical Analysis of Economic Growth and Shifting PPC

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

Implicit vs. Explicit Costs in Business Decision-Making

A local entrepreneur is considering launching a startup. The analysis shows explicit startup costs o

Integrative Analysis: Economic Concepts in Business Decision-Making

This integrative question requires you to apply several economic concepts—scarcity, opportunity cost

Marginal Analysis in Consumer Choice

Discuss the role of marginal analysis in consumer decision-making, focusing on the concept of dimini

Marginal Analysis in Production Decisions

Apply the concepts of marginal cost and marginal revenue using marginal analysis to determine the pr

Marginal Cost Analysis and Production Decisions

This question focuses on marginal cost analysis and its crucial role in a firm's production decision

Market Equilibrium and the Impact of Taxes

This question examines market equilibrium and the effects of a per-unit tax on Good X. Answer all pa

Microeconomics vs. Macroeconomics

This question requires you to differentiate between microeconomics and macroeconomics, and to provid

Opportunity Cost and Strategic Business Decisions

This question requires you to analyze opportunity cost in the context of strategic business decision

Opportunity Cost in Education vs. Work Decisions

Evaluate the concept of opportunity cost in the context of choosing between full-time work and highe

Opportunity Cost Using PPC and Real-World Scenario

Utilize a Production Possibilities Curve (PPC) to analyze opportunity costs and the impact of techno

Optimal Consumption Rule and Budget Allocation

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

Positive and Normative Economic Analysis

Examine the differences between positive and normative economic analysis using the example of evalua

Production Function and Cost Measures

This question tests your ability to interpret a production function and calculate various cost measu

Production Possibilities Curve Analysis

An economy operates at full employment with a Production Possibilities Curve (PPC) that represents t

Resource Allocation and Decision-Making Across Economic Systems

Analyze how different economic systems allocate resources and the trade-offs involved in their decis

Scarcity and Opportunity Cost Analysis

Analyze how the concept of scarcity influences decision-making at both individual and societal level

Scarcity and Opportunity Cost in Resource Allocation

Discuss the concepts of scarcity and opportunity cost in the context of personal budgeting. Consider

Scarcity and Opportunity Cost: Decision Making Basics

This question examines the core concepts of scarcity and opportunity cost in economic decision makin

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 and Comparative Advantage in a Global Market

This question examines trade benefits driven by comparative advantage. Answer every part using the d

Trade-offs in Government Policy Decision

Analyze the concept of trade-offs in government budget allocation using cost-benefit analysis.

Trade-offs in Resource Allocation Decisions

A small business owner must decide between investing in new technology, expected to increase product

Analyzing Demand Shifts in a Local Market

This question explores the determinants of demand and their impact on the market. Answer the followi

Analyzing Diminishing Marginal Utility and Demand

This question explores the concept of diminishing marginal utility and its relationship to the downw

Analyzing Taxation and Elasticity in Market Outcomes

Assess the incidence of a per-unit tax in a market with elastic demand and inelastic supply.

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

Comparative Statics: Demand Increase

For a market with an initial demand curve $$P = 80 - 2Q$$ and supply curve $$P = 20 + Q$$, a rise in

Cross Price Elasticity and Market Competition

Investigate the relationship between two goods using cross-price elasticity of demand.

Double Shifts in Supply and Demand

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

Effect of a Price Ceiling and Import Quota

Discuss the outcomes of government intervention in the housing market through a price ceiling and an

Environmental Impact in Car Manufacturing

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

Evaluation of a Price Floor in the Smartphone Market

In the competitive smartphone market, the equilibrium is at $400 for 10,000 smartphones sold monthly

FRQ 2: Supply Response in the Automotive Tire Market

An automotive tire manufacturer experiences a technological innovation that lowers its production co

FRQ 7: Market Intervention - Analysis of a Price Ceiling

In a market where the demand function is $$D: P = 150 - 2*Q$$ and the supply function is $$S: P = 20

FRQ 17: Reservation Price and Producer Surplus

A firm’s minimum acceptable price (reservation price) for a product is provided along with the actua

FRQ 19: Analyzing Short Run vs. Long Run Supply Elasticity

A producer’s supply of a good is observed over two time periods. In the short run, a price increase

FRQ 20: Integrated Analysis in the Electric Vehicle Market

Electric vehicles (EVs) have been gaining popularity. Initially, the market demand is given by $$D:

Impact of a Government-Imposed Price Floor

Examine the effects of a government-imposed price floor on a market.

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

Implications of a Price Floor in the Athletic Shoes Market

A price floor of $70 is set in the athletic shoes market where the equilibrium price is $60 with 600

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 Policies: Tariffs and Quotas Impact on Domestic Markets

This question explores the impact of international trade policies on domestic markets, focusing on t

Law of Demand: Effects of Price Change on Quantity Demanded

A market study finds that when the price of smartphones increases from $$\$500$$ to $$\$600$$, the q

Manufacturing Emissions and Public Health

A manufacturing plant emits pollutants that have adverse effects on local public health. The market

Market Effects of Advertising

A major advertising campaign is launched for a product, which is expected to influence consumer beha

Market Equilibrium, Consumer and Producer Surplus

Analyze market equilibrium and welfare analysis in a widget market.

Market Impact of Rent Controls on Housing

In a housing market, the original equilibrium is at $1,200 with 800 houses rented. Rent controls cap

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

Noise Externality in Restaurant Operations

A restaurant operating late at night generates noise that disturbs local residents, creating a negat

Per-Unit Tax and Market Efficiency

Consider a competitive market for a generic product. The government introduces a per-unit tax which

Price Elasticity of Demand Analysis – Calculation and Interpretation

This FRQ assesses a firm's pricing strategy using elasticity measures. Answer the following parts us

Short-run vs Long-run Supply Elasticity Analysis

Differentiate between short-run and long-run supply elasticities and illustrate these differences wi

Simultaneous Shifts in Supply and Demand: Indeterminate Outcomes

Initially, a market is in equilibrium at $$P=40$$ and $$Q=80$$. Due to external factors, demand incr

Substitutability in Demand: Price Changes of Related Goods

Consider a scenario where an increase in the price of tea results in changes in the demand for coffe

Substitute and Complement Effects

This question explores the impact of changes in the price of related goods on demand. Answer the fol

Supply Elasticity and Producer Behavior

The following table shows data on the quantity supplied of a product at various prices: | Price ($)

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

Taxation Impact on Market Equilibrium

This question examines the impact of an excise tax on market equilibrium. Answer the following: (a)

Waste Management in the Fast Food Industry

The fast food industry generates substantial waste, creating a negative externality for local commun

Wastewater Contamination in Textile Production

Textile manufacturing can generate wastewater that contaminates local water bodies. In this market,

Accounting vs. Economic Profit Analysis

A restaurant owner operates in a competitive market and, over a month, earns a total revenue of $200

Analyzing MC and AVC: A Graphical Perspective

Interpret the relationship between the marginal cost (MC) and average variable cost (AVC) curves usi

Analyzing the Production Function and Marginal Returns

A firm produces widgets using labor as its only variable input. The table below shows the labor inpu

Bottled Water Production and Plastic Waste

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

Competitive Market Long-Run Adjustments: Entry and Exit

Analyze how a perfectly competitive market adjusts in the long run through entry and exit of firms.

Cost Functions and Marginal Analysis and Optimal Production in Perfect Competition

A firm’s total cost function is given by $$TC(Q) = Q^2 + 10*Q + 100$$ and it faces a constant market

Dairy Production and Manure Pollution

Dairy production can create negative externalities, notably through manure pollution. Analyze the re

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

Economies and Diseconomies of Scale Analysis

Discuss the impact of economies and diseconomies of scale on a firm's long-run cost structure using

Effects of Scale on Long-Run Production Costs

A firm’s long-run average total cost (LRATC) is represented by the function $$LRATC = 100 + \frac{20

Entry and Exit Decisions: Market Adjustments in Perfect Competition

Evaluate the long-run entry and exit rules in a perfectly competitive market and analyze how these d

Fishing Industry and Overfishing Externalities

The fishing industry often suffers from overfishing, which can be viewed as a negative externality a

Fossil Fuel Energy Production and Pollution

Fossil fuel energy production has substantial negative externalities due to air pollution. Analyze t

FRQ 1: Production Function Analysis – Marginal Product

A firm’s production function relates the number of variable inputs (labor) to the total output produ

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 Production Cost Analysis

A firm operates in the short run with a fixed cost (FC) of $200. Its variable cost (VC) function is

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 5: Economic Profit vs. Accounting Profit

A restaurant generates $1,000 in total revenue in one operating period. Its explicit costs (such as

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 9: Production Decisions Under a Shift in Demand

A firm operating in a perfectly competitive market faces a shift in demand. The attached graph shows

FRQ 13: Short-Run Shutdown Analysis

A firm's decision in the short run depends on its ability to cover variable costs. Part A: Define t

FRQ 15: Impact of Increased Rental Rate on Production

A firm that utilizes both labor and capital to produce goods faces an increase in the rental rate of

FRQ 19: Profit Analysis with Changing Market Prices

Market prices can have a large impact on a firm’s profitability. Part A: Describe how a change in t

Input Price Changes and Cost Curvature

Analyze the impact of an increase in input prices on a firm's cost curves.

Integration of Production Decisions and Market Outcomes

A firm operating in a perfectly competitive market has a production function given by $$Q = L^{0.5}$

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 Economies of Scale

A firm’s long-run average total cost (LRATC) data is provided in the table below. Use this informati

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

Marginal Analysis and Optimal Output

A competitive firm faces a market price of $15 per unit. Its total cost function is given by $$TC(Q)

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 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 Revenue vs. Marginal Cost Analysis

A competitive firm has the following data on output, total revenue, and total cost as shown in the t

Market Price Change and its Impact on Output and Shutdown

A sudden market event causes the market price to drop from $30 to $20. Analyze the impact of this ch

Perfect Competition Market Graph Analysis

In a perfectly competitive market, many small firms operate as price takers. Answer the following pa

Production Function Analysis

This question examines the production function and marginal product concepts. Consider the table pro

Production Function Analysis

A firm uses labor as its only variable input. The table below shows the number of workers (L) employ

Production Function Analysis: Marginal Products and Diminishing Returns

Discuss the concept of the production function and describe the relationship between inputs and outp

Profit Calculation and Determination

Using the provided revenue and cost data, calculate the firm's profits and distinguish between accou

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 Shutdown Decision

A firm faces a fixed cost of $150 and a variable cost function given by $$VC(Q) = 5*Q + 0.5*Q^2$$. T

Technological Improvement and Production Efficiency

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

Technological Improvements and Cost Impact

A firm adopts a new technology that increases the marginal product of labor. (a) Explain how this

Trade‐Offs Between Fixed and Variable Inputs

A firm that has been operating in the short run (with at least one fixed input) decides to shift to

Advertising Effects on Demand Elasticity in Monopolistic Competition

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

Barriers to Entry and Market Dynamics in Imperfect Competition

Discuss the role of barriers to entry in imperfectly competitive markets and analyze their impact on

Comparative Analysis of Elasticities: Monopoly vs. Monopolistic Competition

In this question, you will compare the price elasticity of demand for a monopolist versus a firm in

Comparative Efficiency in Monopolistic Competition vs. Monopoly

Compare the efficiency outcomes in a monopolistic competition market and a pure monopoly.

Cost Analysis in Boutique Electronics

A boutique electronics firm operates under imperfect competition. The firm has a fixed cost of $900,

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.

Environmental Externality in the Automobile Industry

In the automobile industry, firms operate in an imperfectly competitive market and produce vehicles

FRQ 7: Monopoly Deadweight Loss Analysis

A monopolist faces the market demand function $$P = 120 - 2*Q$$ and has a constant marginal cost of

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 14: Price Elasticity Analysis in Differentiated Markets

A firm operating in a monopolistically competitive market notices changes in consumer responsiveness

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

Government Intervention in an Oligopolistic Market

In an oligopolistic market operating under collusion, the government intervenes by imposing a price

Government Intervention in Luxury Smartphone Accessories Market

Consider a monopolistically competitive market for luxury smartphone accessories. Firms differentiat

Government Intervention in Monopoly Markets

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

Government Price Controls and Subsidies in Monopolistic Competition

A government has imposed a price ceiling on a product produced in a monopolistically competitive ind

Impact of Advertising in Monopolistic Competition

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

Impact of Advertising on Demand Elasticity in Monopolistic Competition

Firms in monopolistic competition often use advertising to differentiate their products and decrease

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 Adjustments in Monopolistic Competition

In monopolistic competition, firms initially earn economic profits but eventually, market entry erod

Marginal Analysis at Deli Delights

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

Market Concentration and Collusion in Oligopolies

Market concentration in oligopolistic industries can lead to collusion. Analyze how high market conc

Market Entry and Demand Curve Adjustments in Monopolistic Competition

This question investigates how the entry of new firms affects the demand curve faced by an incumbent

Monopoly Profit Maximization and Regulation

This question requires analysis of a monopoly firm's profit-maximizing decisions and the impact of g

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

Product Differentiation in Monopolistic Competition

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

Profit Maximization in Virtual Reality Experiences

A virtual reality (VR) experience firm operates in an imperfectly competitive market. The firm has a

Strategic Pricing in Price Discrimination Scenarios

Evaluate a firm's strategic pricing decisions when engaging in price discrimination across different

Tax Effects in a Monopolistically Competitive Differentiated Goods Market

Consider a market characterized by monopolistic competition where firms sell differentiated products

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

Technology Hardware Market Externalities

A firm producing high-end technology hardware in an imperfectly competitive market causes negative e

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 Monopsony: Wage Determination and Employment

In a monopsonistic labor market, a single employer has the power to set wages. Consider the followin

Analyzing Diminishing Marginal Returns and Factor Demand

Firms often experience diminishing marginal returns as more of a variable input is employed. Explain

Application of the Least Cost Rule

This question assesses the application of the least cost rule in a firm’s decision to choose between

Application of the Least Cost Rule in Factor Markets

This question involves applying the least cost rule to determine the optimal combination of labor an

Calculating Marginal Factor Cost in a Monopsony

This question requires you to calculate the marginal factor cost (MFC) in a monopsonistic labor mark

Capital-Labor Substitution in Response to Rising Wages

This question examines how a firm adjusts its mix of capital and labor inputs when faced with an inc

Comparative Factor Pricing: Changes in Input Prices

A firm employs both labor and capital. Initially, the prices are $$P_L = 10$$ and $$P_K = 20$$, with

Comparative Statics: Factor Price Increases and Labor Demand

Assume that a firm's demand for labor is derived from its product market. Analyze how an increase in

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

Comparing Factor Market Outcomes: Monopsony versus Perfect Competition

Consider two distinct labor markets: one that operates under perfect competition and one that is cha

Cost Minimization and Factor Substitution Using the Least Cost Rule

A firm uses both labor and capital for production. The firm’s technology yields a marginal product o

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 Marginal Revenue Product

A firm operates in a perfectly competitive product market where the product sells at $20 per unit. T

Derived Demand and MRP Calculation

This question examines the concept of derived demand and the computation of marginal revenue product

Deriving Marginal Revenue Product from a Production Function

A firm’s production function is given by $$Q = L^{0.5} * K^{0.5}$$. With capital fixed at K = 100 an

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 =

Determining Profit Maximizing Labor Using Production Data

A firm uses production data to decide how many workers to hire. Using this data, determine the profi

Dynamic Adjustments in Factor Markets

A firm with a production function $$Q = L^{0.6} * K^{0.4}$$ faces dynamic changes in its input marke

Effects of a Government Subsidy on Factor Market Equilibrium

In a competitive market for skilled labor, the government introduces a subsidy of $3 per hour for ea

Effects of Exogenous Wage Changes on Employment

Consider a competitive labor market where the government enacts a minimum wage that is above the mar

Effects of Legal Interventions on Labor Market Costs

New safety regulations increase the cost of hiring labor for firms. Answer the following:

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

Externalities in Food Production: Pesticide Use

A large-scale farm uses pesticides that result in runoff, which negatively impacts neighboring commu

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

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

International Trade and Factor Demand

A firm that primarily served the domestic market begins exporting, increasing the overall demand for

Introduction to Factor Markets: Basics and Equilibrium

Discuss and illustrate key concepts in factor markets including factor markets themselves, derived d

Labor Supply and Demand in Competitive Markets

Consider a competitive labor market. Analyze the market equilibrium and the effects of a binding min

Labor Supply Shifts Due to Immigration

This question explores the effects of an influx of immigrants on the labor market, particularly on l

Least Cost Rule and Factor Choice

A firm uses both labor and capital in production. It faces input prices of $$P_{L} = 15$$ and $$P_{K

Long-Run Adjustments in Factor Markets

Firms can adjust all factors of production in the long run. This question examines the differences b

Manufacturing and Community Health

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

Marginal Factor Cost Analysis

A firm faces an upward sloping labor supply schedule and must determine its marginal factor cost (MF

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

Monopsonistic Labor Market Analysis

This question analyzes the characteristics of a monopsonistic labor market, where a single employer

Monopsonistic Labor Market Analysis

In a monopsonistic labor market, a single employer determines both the wage rate and employment leve

Multi-Input Factor Market Analysis with Budget Constraint

A firm uses both labor and capital with production functions characterized by $$MPL = 15 - 0.3*L$$ a

Negative Externality in Mining Operations

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

Negative Spillover in Chemical Production

A chemical manufacturing firm produces industrial chemicals but emits harmful substances during prod

Off-Farm Employment and Farm Labor Supply

Analyze how off-farm employment opportunities impact the labor supply available to the agricultural

Overextraction of Water Resources for Agriculture

In a region with intensive agriculture, water is extracted from a common source. This overextraction

Profit Maximization and Hiring Decisions in Competitive Factor Markets

A firm in a competitive labor market determines its number of hires by equating its marginal revenue

Profit Maximization in Perfectly Competitive Factor Markets

A firm operating in a perfectly competitive labor market hires workers until its marginal revenue pr

Profit Maximizing Behavior in Perfectly Competitive Factor Markets

A firm operating in a perfectly competitive labor market faces a constant wage rate of $20 per hour.

Profit-Maximizing Behavior in Hiring Based on MRP = Wage

A firm operating in a perfectly competitive labor market consults the following table to decide its

Skill-Biased Technological Change and Labor Market Outcomes

Recent technological advancements have increased the productivity of skilled workers relative to uns

Technological Change and Factor Demand

A technological innovation increases labor productivity in a manufacturing firm. Analyze the impact

Technological Change and Factor Market Adjustments

A new technology increases a firm's labor productivity. Initially, the firm's marginal revenue produ

Wage Determination and the Role of MRP and MFC

A competitive firm faces the following functions in its labor market: $$MRP = 30 - 0.5*x$$ and $$MFC

Wage Determination: A Case Study

In a small town, a manufacturing plant is the primary employer. Initially, the plant pays workers $1

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

Allocative Efficiency and Deadweight Loss

Using a market for Good X, analyze the conditions for social efficiency and identify any inefficienc

Analyzing Deadweight Loss in Imperfect Markets

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

Cost-Benefit Analysis in Regulatory Policy

A government is considering imposing a regulation to reduce harmful emissions from factories. This r

Deadweight Loss Correction in Manufacturing with Externality

A manufacturing plant produces goods while causing a negative externality in the form of noise pollu

Dynamic Analysis of Externality Correction over Time

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

Effects of Price Floors on Market Efficiency

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

Externality from Pesticide Use in Agriculture

Farmers using pesticides may impose external costs on the environment, such as damage to neighboring

FRQ 1: Graphing the Impact of a Per Unit Tax on Market Efficiency

Analyze the impact of a per unit tax on a competitive market for Good X. In this problem, you will d

FRQ 8: Government Regulation and Non-Price Interventions

Discuss how non-price regulations, such as environmental or safety standards, can be used by the gov

FRQ 10: Government Intervention in Public Goods Markets

Public goods are often under-provided due to the free rider problem. Analyze the role of government

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 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.

Government Intervention in External Markets: Case Study Analysis

A city faces significant air pollution from local manufacturing. In response, the government impleme

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

Impact of a Price Ceiling on Market Efficiency

This FRQ examines how a price ceiling affects market equilibrium, consumer surplus, producer surplus

Impact of Technological Improvements on External Costs

A factory implements a new technology that reduces its emission of pollutants, thereby lowering the

Long Run Effects of Government Subsidies on Market Structure

An industry receives government subsidies in the short run. Over time, these subsidies may alter mar

Market Power and Price Discrimination

A firm with significant market power employs price discrimination strategies in different consumer s

Measuring Income Inequality: Lorenz Curve and Gini Coefficient

Income inequality is a significant issue in many economies. Analyze how income distribution is measu

Negative Externalities and Tax Policy

This FRQ analyzes the inefficient market outcome caused by a negative externality and evaluates how

Price and Cross-Price Elasticity Analysis in Retail Markets

This FRQ assesses your ability to compute both own-price and cross-price elasticities and interpret

Price Ceiling in the Rental Market

A city implements a binding price ceiling on rental housing to ensure affordability. Analyze the mar

Price Floor in Agricultural Markets

The government has implemented a binding price floor to support wheat farmers' incomes. Analyze the

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

Regulating Natural Monopolies

Natural monopolies often require government regulation to prevent excessive pricing. Analyze how gov

Role of Information Disclosure in Externality Adjustment

In some markets, asymmetric information can exacerbate externalities by obscuring the true social co

Subsidies in Monopolistically Competitive Markets

In a monopolistically competitive market, a per-unit subsidy is introduced to encourage the producti

Tax Burden Distribution in a Competitive Market

Analyze how the burden of a per-unit tax is distributed between buyers and sellers in a competitive

The Dynamics of Income Distribution: Lorenz Curve Analysis

Examine how the Lorenz curve represents income distribution and inequality. Explain what deviations

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