AP Microeconomics FRQ Room

Comparative Advantage and International Trade

This question focuses on comparative advantage and its role in international trade. Answer all parts

Comparative Advantage and Trade Decisions

Evaluate comparative advantage between two countries and discuss potential gains from trade based on

Comparative Advantage in Production Decisions

Discuss the concept of comparative advantage and how it influences specialization in production.

Cost-Benefit Analysis of a Public Policy Initiative

Perform a cost-benefit analysis for a proposed public infrastructure project, identifying explicit a

Economic Growth via the Production Possibilities Curve

This question examines economic growth through shifts in the Production Possibilities Curve (PPC).

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.

Factors of Production Analysis

This question focuses on the factors of production and their impact on economic output and productiv

Factors of Production and Resource Allocation

This question assesses your understanding of the factors of production and how they contribute to re

FRQ 5: Factors of Production – Analysis of Resource Allocation

This question addresses the four factors of production and the role they play in resource allocation

FRQ 6: Market Analysis – Supply and Demand Shifts

This question explores how scarcity and changes in available resources can shift market outcomes wit

FRQ 12: Efficiency and Economic Growth via the PPC

This question examines the concepts of productive and allocative efficiency using the Production Pos

Impact of Economic Growth on Production Possibilities

An economy initially has a production possibilities frontier (PPC) connecting 100 units of Good A to

Interpreting Costs in a Business Venture

This question deals with the identification and evaluation of implicit and explicit costs in a busin

Labor vs. Capital: Analyzing Factors of Production

Evaluate the efficiency of resource allocation by comparing the use of labor and capital in producti

Marginal Analysis and Consumer Choice

This question tests your understanding of marginal utility and the principle of diminishing marginal

Marginal Analysis in Consumer Choice

This question tests your understanding of marginal utility and consumer choice decisions. Answer eac

Marginal Product and Diminishing Returns

This question focuses on the concept of marginal product of labor and diminishing returns. Answer ev

Microeconomics vs. Macroeconomics Analysis

This question focuses on differentiating microeconomics and macroeconomics and their applications.

Microeconomics vs. Macroeconomics Distinction

Differentiate between microeconomics and macroeconomics by defining each branch and providing distin

Opportunity Cost Using PPC and Real-World Scenario

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

Opportunity Costs and Trade-offs in Consumer Choices

Examine the concepts of opportunity costs and trade-offs in consumer decision-making.

Production Function and Cost Measures

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

Resource Scarcity and Market Outcomes

A key input in electronics manufacturing, such as rare earth metals, experiences global scarcity due

Shifts in the PPC and Economic Growth

Analyze how economic growth, driven by factors like technological improvement, affects the productio

Specialization, Comparative Advantage and Terms of Trade

This question analyzes the benefits of specialization along with the concepts of comparative advanta

Supply and Demand and Scarcity

Analyze how the concept of scarcity affects market supply and demand and the resulting equilibrium i

Trade-offs in Government Policy Decision

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

Analyzing a Price Ceiling in the Fast Food Market

In response to public pressure on food prices, a city imposes a price ceiling of $6 on fast food, wh

Analyzing Income Elasticity and Market Demand Changes

Examine how changes in income affect market demand by analyzing income elasticity.

Analyzing Shifts in Demand Due to Changes in Consumer Income

This question focuses on how changes in consumer income affect the demand curve and how normal versu

Combined Analysis of Supply, Demand, and Government Intervention: Price Ceiling Case Study

In a rental housing market, the original equilibrium rental price is $$\$800$$ and the equilibrium q

Congestion in Urban Real Estate Development

Urban real estate development can create significant negative externalities such as increased noise

Cross Price Elasticity and Income Elasticity

This question examines other elasticities beyond price elasticity: cross price elasticity and income

Cross Price Elasticity: Substitutes vs. Complements

Cross price elasticity of demand measures how the quantity demanded for one good responds to a chang

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

Effects of a Price Ceiling in the Gasoline Market

In an effort to make gasoline more affordable, a government imposes a price ceiling at $2.80 per gal

Effects of a Price Floor in the Furniture Market

A government sets a price floor of $250 on furniture in a market currently in equilibrium at $200 wi

Effects of Subsidies on Market Supply and Producer Surplus

A government introduces a subsidy to domestic producers, reducing production costs. Analyze how this

Elasticity of Demand Calculation

This question measures your ability to calculate and interpret price elasticity of demand. Answer th

Elasticity of Supply: Short-run vs Long-run Analysis

A study in the widget market provides the following data: At a price of $$25$$, the quantity supplie

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 5: Price Elasticity of Supply in the Electronics Market

A manufacturer observes that when the price of an electronic gadget increases from $200 to $240, the

FRQ 6: Cross Price Elasticity of Demand for Coffee and Tea

In the market for hot beverages, an increase in the price of coffee by 20% resulted in a 10% increas

FRQ 6: Market Intervention - Analysis of a Price Floor

Consider a market described by the demand function $$D: P = 150 - 2*Q$$ and the supply function $$S:

FRQ 7: Calculating Income Elasticity of Demand

A department store finds that when consumer incomes increase by 5%, the quantity demanded for brande

FRQ 9: Welfare Analysis with Tax Implementation and Deadweight Loss

Consider a market with the demand function $$D: P = 150 - Q$$ and the supply function $$S: P = 50 +

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 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 19: Effects of Import Quotas in International Trade

A country imposes an import quota on automobiles to protect domestic producers. The domestic market

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 Price Floors on Markets

This question examines the effects of price floors on market outcomes. Answer the following: (a) De

Impacts of a Price Ceiling in the Dairy Market

The dairy market has an equilibrium price of $4 per gallon with 300 gallons sold. The government set

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 Effects on Normal and Inferior Goods

This question examines how changes in consumer income affect the demand for normal and inferior good

International Trade Impact: Tariffs and Market Outcomes

The government imposes a tariff on imported electronics. Analyze how this tariff affects the domesti

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

Market Equilibrium and Welfare Analysis

This question involves calculating market equilibrium and evaluating consumer and producer surplus a

Market Shifts due to External Shocks

This question examines how external shocks, such as increases in raw material costs, shift the suppl

Negative Externality in Widget Production

In the widget market, a factory produces widgets while emitting pollutants that impose an external c

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

Analysis of Long-Run Production Costs

Discuss the long-run production cost structure of a firm, focusing on the concepts of economies of s

Analyzing Break‐Even and Shutdown Points

Define and contrast the break‐even point and the shutdown point for a firm in a competitive market.

Calculating the Shutdown Point

Determine the shutdown point for a firm based on its variable cost structure using mathematical anal

Comprehensive Perfect Competition Market Analysis

A perfectly competitive market consists of 5 identical firms, each having a cost function $$TC(Q) =

Economies and Diseconomies of Scale Analysis

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

Effect of a Per-Unit Subsidy on Production and Deadweight Loss

A government introduces a per-unit subsidy of $3 for a firm operating in a competitive market. The f

Estimating Average and Marginal Costs from a Cost Function

Given the total cost function $$TC(Q)= 5 + 2*Q + Q^2$$, (a) Derive the expressions for average tota

Ethanol Production and Land Use Externalities

Ethanol production can lead to land use externalities, leading to environmental degradation not refl

Fossil Fuel Energy Production and Pollution

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

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 5: Economic Profit vs. Accounting Profit

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

FRQ 5: Profit Maximization in Perfect Competition

Firm D faces a market price of $20 and has a total cost function given by $$TC(Q) = 50 + 2*Q^2$$. Us

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 8: Market Supply and Firm Production Decisions

Two firms operate in a competitive market where the market price is $30. Their total cost functions

FRQ 10: Production Decisions under Diminishing Returns

A firm experiences diminishing marginal returns as it increases its labor input. Part A: Explain th

FRQ 11: Cost Minimization in the Long Run

Long-run cost minimization requires firms to choose the combination of inputs that minimizes the tot

FRQ 11: Short Run versus Long Run Decision Analysis

A firm’s short-run total cost function is given by $$TC_{SR}(Q) = 100 + 5*sqrt(Q)$$, while its long-

FRQ 12: Impact of Technological Change on Production Function

A firm introduces a new technology that alters its production function. The table below shows output

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 18: Industry Entry and Exit Decisions

In a perfectly competitive industry, a representative firm faces a total cost function of $$TC(Q) =

FRQ 19: Impact of Increased Wage on Production and Costs

A fast-food chain originally had a variable cost function of $$VC(Q) = 2 * Q + 0.1 * Q^2$$. Due to a

FRQ 20: Cost Function Evolution and Scaling Decisions

A firm’s cost function is given by $$TC(Q) = 200 + 3*Q + 0.5*Q^2$$ and it operates in a perfectly co

Government Intervention: Per‐Unit Tax and Deadweight Loss

A competitive market for Good X is initially in equilibrium at a price $$P_0 = 8$$ and quantity $$Q_

Graph Analysis of Perfect Competition Market Supply and Demand

The following graph represents the market for Good X in a perfectly competitive market. Answer the

Graphing Cost Curves and Determining Shutdown Point

A firm’s short-run cost structure is represented by several cost curves. Based on the provided graph

Graphing Production and Cost Curves

A firm’s cost curves are presented in the graph provided. Analyze the diagram and answer the followi

Impact of Scale on Average Total Cost

Discuss the relationship between output scale and average total cost in the context of economies of

Impact of Technological Improvement on the Production Function

A firm initially has a marginal product of labor given by $$MPL_{old} = 40 - 3*L$$. After adopting n

Industry Supply and Firm’s Cost Structure

An industry consists of 10 identical firms, each with a cost function $$TC(Q) = Q^2 + 40$$. The mark

Input Costs and Rental Rate Impacts on Production Decisions

A firm uses two inputs, capital (K) and labor (L), with a production function given by $$Q = 2*K + 3

Input Price Change Impact Analysis

A firm’s cost function is given by $$TC(Q) = 2*Q^2 + 50$$ when the rental rate of capital is $$r = 1

Labor Cost Decisions in a Competitive Market

A firm uses labor as its only variable input. The production data is given in the table below. The w

Labor Productivity and Optimal Hiring Decisions

A firm records the following production data for varying levels of labor input. Use this data to ana

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 Efficiency and Factor Inputs

A firm is evaluating its production process to achieve maximum efficiency. Analyze production effici

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 Production Cost Analysis: Bakery Cost Curves

A small bakery has fixed costs of $$FC = 50$$ and hires workers at a wage rate of $$w = 15$$ per wor

Short-run Production Costs Analysis

A firm operating in the short run has a total cost (TC) function given by $$TC(Q) = 100 + 20*Q + 2*Q

Short-run Shutdown Decision in Perfect Competition

A firm in a perfectly competitive market is analyzing its short-run operations. The following cost d

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.

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

Analyzing Efficiency Costs of Monopoly Market Power

Market power in a monopoly often leads to efficiency losses. Evaluate these losses by analyzing allo

Case Study: Oligopolistic Collusion and Game Theory

Examine the conditions that lead to collusion in an oligopolistic market and analyze the effectivene

Comparative Analysis of Allocative Efficiency in Market Structures

Allocative efficiency occurs when price equals marginal cost. Compare how perfectly competitive, mon

Consumer Surplus and Deadweight Loss in Imperfect Competition

Examine the welfare effects of market inefficiencies in imperfect competition.

Cost Curves and Inefficiencies in Imperfect Competition

Explore the role of cost curves in determining output decisions and the resulting inefficiencies in

Cost Evaluation for Craft Clothing Co.

Craft Clothing Co. operates in a market with imperfect competition. The firm has a fixed cost of $40

Cost Structures and Natural Monopoly Dynamics

Natural monopolies operate on the declining portion of their Average Total Cost (ATC) curve. Analyze

Cost Structures in Monopolistic Competition

Examine the implications of cost structures on firm behavior in monopolistic competition.

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 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 10: Third-Degree Price Discrimination in Monopolies

A monopolist serves two separate markets where demand conditions differ. In Market A, the demand fun

FRQ 16: Comparative Market Structure Analysis

Compare how monopoly, monopolistic competition, and oligopoly differ in terms of pricing, output, ef

FRQ 19: Non-Price Competition through Advertising

Firms in monopolistically competitive markets often rely on advertising to improve market share. Con

Game Theory and Collusion in an Oligopoly

Consider an oligopolistic market where two firms are deciding whether to "Cooperate" (maintain high

Government Intervention in Monopoly Markets

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

Government Intervention in Natural Monopolies

Evaluate the need for government intervention in natural monopolies and its impact on pricing and ma

Government Regulation of a Natural Monopoly

A natural monopoly is subject to government regulation that forces it to set price equal to its aver

Government Tax in the Fitness Club Industry

The fitness club industry is experiencing rapid growth in a competitive market environment. The gove

Graphical Analysis of Allocative and Productive Efficiency in Monopolies

Analyze the efficiency losses in monopoly markets by comparing the firm’s output to the socially opt

Impact of Advertising on Demand Elasticity in Monopolistic Competition

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

Impacts of Price Wars in Oligopolistic Markets

Price wars in oligopolistic markets can have significant short-run and long-run effects. Analyze the

Long-Run Tax Effects in the Coffee Shops Market

In the coffee shops market, which exhibits characteristics of imperfect competition in the long run,

Marginal Revenue in Price Discrimination

Examine how marginal revenue is affected under price discrimination scenarios compared to single-pri

Market Entry in Monopolistic Competition: Short-Run vs. Long-Run Equilibrium

In monopolistic competition, firms earn economic profits in the short run, which attract new entrant

Market Power and Pricing in a Monopoly

A monopolist who enjoys considerable market power sets its output by comparing marginal revenue (MR)

Market Structures and Innovation: Role of Economies of Scale

Analyze how economies of scale contribute to the formation of natural monopolies and discuss policy

Monopolistic Competition: Short-Run and Long-Run Equilibrium Analysis

This question examines your understanding of monopolistic competition, including the firm’s demand c

Monopolistic Competition: Short-run vs. Long-run Equilibrium

Analyze the profit dynamics of firms under monopolistic competition in both short-run and long-run s

Monopoly Profit Maximization

Examine the profit-maximizing behavior of a monopolist.

Negative Externalities and Regulatory Challenges in the Shipping Industry

A shipping company operating within an oligopolistic market is responsible for significant negative

Negative Externality in the Soft Drink Market

A soft drink manufacturer in a monopolistically competitive market generates a negative externality

Oligopoly and Game Theory: Payoff Matrix Analysis

This question focuses on oligopolistic markets and the application of game theory. You will analyze

Optimizing Input Use in Digital Printing

Digital Print Co. operates in an imperfectly competitive market where it produces digital prints. Th

Price Discrimination in a Natural Monopoly

Analyze the concept of price discrimination in the context of a natural monopoly. Your answer should

Price Elasticity and Price Discrimination Strategies

Analyze how variations in price elasticity of demand enable firms to engage in third-degree price di

Production Costs in Innovative Apparels

Innovative Apparels operates in an imperfectly competitive market and uses skilled labor to produce

Rising Input Costs in a Natural Monopoly

A natural monopoly experiences an increase in input costs causing its average total cost (ATC) curve

Short-Run and Long-Run Analysis in Monopolistic Competition

Examine the transition from short-run profit to long-run normal profit in a monopolistically competi

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

Tax Effects on Organic Food Producers

Organic food producers operate in a niche market that exhibits characteristics of imperfect competit

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

Third-Degree Price Discrimination and Welfare Effects

A monopolist can practice third-degree price discrimination by segmenting the market into two groups

Analysis of MRP and MFC in Wage Determination

A firm employs labor where the marginal revenue product (MRP) is given by $$MRP = 100 - 5*L$$ and th

Analysis of Per-Unit Tax in a Competitive Labor Market

Consider a competitive market for labor in which firms hire workers where the marginal revenue produ

Analyzing the Effects of a Tax on Labor Employment

A government tax on each worker hired increases the costs for firms. Analyze the impact of such a ta

Applying the Least Cost Rule in Factor Markets

A firm uses both labor and capital in its production process. The marginal product of labor (MPL) is

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

Changes in Derived Demand due to Technological Advances

This question examines the impact of technological improvements on the derived demand for labor. A f

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

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 Analysis and Factor Input Decisions

A firm produces output using the production function $$Q = L^{0.5} * K^{0.5}$$, where L is labor and

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

Derived Demand Analysis

A coffee shop uses coffee beans as an input to produce coffee beverages. Because the demand for coff

Derived Demand for Capital Analysis

Consider a firm that rents capital for production. The marginal product of capital is given by $$MPK

Determinants of Labor Supply

Labor supply in a market is influenced by various factors. Consider three determinants: personal val

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 Factor Demand under Seasonal Demand Shifts

This question analyzes how seasonal fluctuations in product demand affect the firm's derived demand

Economic Impact of Changing Government Policies on Factor Markets

A regional economy experiences simultaneous policy changes: an increase in the minimum wage and a re

Economies of Scale and Factor Demand

This question explores how economies of scale, which reduce average production costs as output incre

Effect of Product Market Shifts on Factor Demand

Changes in the final product market can influence the demand for factors of production. Explore how

Effects of Legal Interventions on Labor Market Costs

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

Effects of Universal Basic Income on Labor Supply

A government introduces a universal basic income (UBI), which provides a fixed income to all citizen

Equilibrium in Perfectly Competitive Factor Markets

Consider a competitive labor market where firms hire workers until $$MRP = MFC$$. The table below pr

Externalities in Agriculture: Overuse of Fertilizers

Excessive fertilizer use in agriculture leads to nutrient runoff that damages aquatic ecosystems. An

Government Intervention and Factor Market Outcomes

A government policy imposes a binding minimum wage in the labor market. The following table summariz

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

Impact of Automation on Derived Demand for Labor

A manufacturing firm adopts automated technology, which reduces the need for labor. Prior to automat

Impact of Derived Demand Shock from Increased Product Price

A smartphone manufacturer experiences an increase in the final product price from $$P = 400$$ to $$P

Impact of Government Policy on Factor Supply

This question evaluates the effect of a government-imposed minimum wage, which is set above the comp

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 Technological Improvement on Derived Demand

A firm upgrades its technology, which improves the productivity of labor. Initially, at a given leve

Industrial Overheating: Factory Emissions

A factory’s inefficient cooling process results in overheated emissions that degrade air quality in

Industrial Production and Environmental Costs

A manufacturing plant producing electronic devices generates toxic waste that imposes a negative ext

Introduction to Factor Markets: Basics and Equilibrium

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

Labor Demand Adjustments in an Agricultural Context

This question explores how external factors (e.g., weather conditions) affect labor demand in an agr

Labor Supply Elasticity and Wage Changes

This question tests your understanding of labor supply elasticity and its implications when wages ch

Labour Supply Elasticity and Worker Response Analysis

Consider the following labor market data: | Wage ($) | Labor Supplied (workers) | |----------|------

Least Cost Input Combination and the Least Cost Rule

Firms choose the combination of inputs that minimizes production costs. Using the least cost rule, a

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

Least-Cost Combination and Factor Price Ratio Analysis

This question involves analyzing the optimal combination of inputs by comparing the marginal product

Long-Run Adjustments in Factor Markets due to Entry and Exit

Over the long run, the entry and exit of firms in a product market affect the derived demand for lab

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 Hiring Decisions in Monopsony

In a monopsonistic labor market, a firm faces the wage function $$w = 100 + 2*L$$ and its marginal r

Marginal Productivity Analysis

A firm has the following marginal product (MP) schedule. The product price is $30. | Workers | MP |

Minimum Wage Effects in Different Market Structures

Evaluate how an imposed minimum wage affects factor markets in both competitive and monopsonistic se

Monopolistic Competition in Factor Markets

Analyze the behavior of factor markets under conditions of monopolistic competition and discuss the

Monopsonistic Factor Market Analysis

This question focuses on analyzing labor market outcomes under a monopsonistic structure and compari

Monopsonistic Labor Market Analysis

Consider a monopsonistic firm operating in the labor market. The table below shows data on the numbe

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 Automobile Manufacturing

In the automobile manufacturing industry, production processes emit pollutants that impose cost on s

Profit Maximization in Perfectly Competitive Factor Markets

This question addresses how firms in perfectly competitive factor markets maximize profits by equati

Profit Maximization under Technological Change

This question explores how technological change affects a firm’s production decisions, specifically

Rapid Increase in Product Demand and Derived Labor Demand

A sudden surge in consumer demand for smartphones leads to an immediate increase in the derived dema

Regression Analysis of Labor Demand

This question analyzes the quantitative relationship between labor demand and wage rates using regre

Skill-Biased Technological Change and Labor Market Outcomes

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

Wage Determination: A Case Study

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

Allocative Efficiency and Deadweight Loss

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

Analyzing Income Inequality: Lorenz Curve and Gini Coefficient

Income inequality in an economy can be assessed using tools like the Lorenz curve and the Gini coeff

Analyzing Negative Externalities and Corrective Tax

Consider a market where production causes a negative externality, leading to a divergence between th

Analyzing Positive Externalities and Subsidy Policies

Examine a market where a positive externality exists, causing the marginal social benefit (MSB) to e

Analyzing Price Ceilings in Monopolistic Competition

In a monopolistically competitive market characterized by product differentiation and downward-slopi

Analyzing Price Controls: Price Ceiling and Price Floor Cases

This FRQ examines the effects of government-imposed price controls, such as price ceilings and floor

Analyzing the Impact of a Progressive Income Tax on Labor Supply

Evaluate how a progressive income tax influences individual labor supply decisions. Consider both th

Comparative Analysis of Government Interventions in Externality Markets

A manufacturing process creates a significant negative externality due to waste emissions. The gover

Comparing Per-Unit Tax and Lump-Sum Tax Effects

A firm in a perfectly competitive market is considering two types of taxes: a per-unit tax and a lum

Correcting Monopoly Externalities Through Taxation

A monopolist operates in a market where a negative externality causes the social marginal cost to ex

Correcting Negative Consumption Externalities with Taxes

Analyze the impact of a per-unit tax designed to correct a negative consumption externality in a mar

Correcting Negative Externalities Through Taxation

A production process in a market generates a negative externality. The private cost to the firm is l

Cost-Benefit Analysis in Regulatory Policy

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

Determining Socially Efficient Output in a Market with Negative Externalities

This FRQ focuses on evaluating social efficiency in the presence of negative externalities. Consider

Effects of a Per-Unit Tax in a Competitive Market

This FRQ examines the impact of a per-unit tax on a competitive market. Consider how the imposition

Evaluating Deadweight Loss and Tax Incidence

A market experiences a per unit tax that distorts the equilibrium and creates deadweight loss.

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 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 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 13: Minimum Wage in a Monopsony Labor Market

Analyze the effects of imposing a minimum wage in a monopsonistic labor market. Explain how it affec

FRQ 14: Government Intervention in R&D Markets

The market for research and development (R&D) exhibits positive externalities, often resulting in un

FRQ 16: Taxation in Competitive vs. Monopolistic Markets

Compare the effects of a per unit tax on a perfectly competitive market with those on a monopolistic

FRQ 19: Government Subsidies and Public Goods Underinvestment

Analyze the market failure associated with the underproduction of public goods and evaluate the role

Government Intervention and Market Power: Effects on Consumer Choice

A dominant firm in an imperfectly competitive market is charging high prices, reducing consumer choi

Government Intervention in External Markets: Case Study Analysis

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

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

Long-Run Equilibrium Adjustments: Entry and Exit in a Competitive Market

Examine how a perfectly competitive market adjusts in the long run when firms earn positive economic

Market Failure from Asymmetric Information

Asymmetric information can lead to market failure in various industries. Answer the following:

Market Failure in Imperfect Competition Due to Market Power

This FRQ analyzes how monopolistic market power leads to allocative inefficiency and deadweight loss

Minimum Wage Effects in the Labor Market

Evaluate the impact of imposing a minimum wage above the market equilibrium on the labor market.

Minimum Wage Effects: Labor Market Analysis

Analyze the impact of a government-imposed minimum wage (a price floor in the labor market) using th

Minimum Wage Policy and Labor Market Equilibrium

Analyze the effects of imposing a minimum wage above the market equilibrium on the labor market. Con

Minimum Wage Policy in Labor Markets

A minimum wage policy acts as a price floor in the labor market. Analyze its impact on employment an

Positive Externality in Renewable Energy Investment

Investment in renewable energy not only reduces fossil fuel use but also provides broad environmenta

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 Impact on a Competitive Market

Consider a perfectly competitive market where the supply function is given by $$P = 25 + Q$$ and the

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

Promoting Positive Externalities with Subsidies

In the market for higher education, positive externalities lead to a divergence between private and

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

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

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

Taxation Effects on a Firm's Cost Structure: Per-Unit vs. Lump-Sum Tax

A firm operating in a perfectly competitive market faces typical cost curves. Government policy is c