AP Microeconomics FRQ Room

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AP Microeconomics Free Response Questions

The best way to get better at FRQs is practice. Browse through dozens of practice AP Microeconomics FRQs to get ready for the big day.

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  • Unit 1: Basic Economic Concepts (35)
  • Unit 2: Supply and Demand (41)
  • Unit 3: Production, Cost, and the Perfect Competition Model (43)
  • Unit 4: Imperfect Competition (45)
  • Unit 5: Factor Markets (47)
  • Unit 6: Market Failure and the Role of Government (39)
Unit 1: Basic Economic Concepts

Analyzing Shifts in Supply and Demand

This question examines the factors leading to shifts in supply and demand and requires a graphical a

Medium

Analyzing Trade-offs Using Production Possibilities and Opportunity Cost

This question requires you to analyze trade-offs using a production possibilities frontier (PPF) and

Hard

Comparative Advantage and Trade

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

Medium

Comparative Advantage in a Domestic Market

This question examines the concepts of absolute advantage and comparative advantage within a domesti

Medium

Complex Comparative Analysis: Positive vs. Normative and Ethical Considerations

Critically evaluate a policy proposal by distinguishing between positive and normative economic stat

Extreme

Cost-Benefit Analysis of a Public Policy

Apply cost-benefit analysis to evaluate a public infrastructure decision.

Hard

Economic Growth and Efficiency

Examine the concepts of economic growth, productive efficiency, and allocative efficiency in relatio

Medium

Economic Systems and Resource Allocation

Analyze how different economic systems answer the three fundamental questions of economics (what to

Medium

Economic Systems and Resource Allocation

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

Medium

Evaluating Economic Systems: Market vs. Command

This question analyzes how different economic systems address resource allocation through the fundam

Medium

Evaluating Entrepreneurial Investment Decisions Amid Scarcity

Assess how the concept of scarcity and opportunity cost informs an entrepreneur’s decision-making in

Medium

Factors of Production Analysis

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

Medium

FRQ 2: Production Possibilities Curve (PPC) Analysis

This question focuses on analyzing the Production Possibilities Curve as a means to illustrate oppor

Medium

FRQ 7: Comparing Microeconomics and Macroeconomics

This question compares the two primary branches of economics by examining their scope, focus, and re

Easy

FRQ 11: Profit Maximization in Competitive Markets

This question involves applying the principles of profit maximization in a perfectly competitive mar

Hard

FRQ 14: Government Intervention in Mixed Economies

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

Medium

FRQ 18: Technological Change and Shifts in the PPC

This question investigates how technological advancements impact the production possibilities of an

Hard

Implicit vs. Explicit Costs in Business Decision-Making

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

Medium

Marginal Analysis and Consumer Choice

Using marginal analysis, examine how a consumer maximizes utility given a limited budget.

Hard

Marginal Analysis in Consumer Choice

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

Medium

Marginal Analysis in Production Decisions

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

Extreme

Marginal Costs in Production Decision

This question focuses on the concept of marginal cost and its role in production decision-making. (

Medium

Marginal Product and Diminishing Returns

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

Hard

Micro vs. Macroeconomics: Scope and Analysis

Economic analysis is conducted at both microeconomic and macroeconomic levels. Using the example of

Medium

Microeconomics vs. Macroeconomics Decision-Making

This question asks you to differentiate between microeconomics and macroeconomics and provide real-w

Easy

Microeconomics vs. Macroeconomics Distinction

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

Easy

Microeconomics vs. Macroeconomics: Scope and Focus

This question addresses the differences between microeconomics and macroeconomics. Answer each part

Medium

Optimal Consumer Choice Under Budget Constraints

A consumer is deciding how to allocate a $$120$$ budget between Good M and Good N. The marginal util

Extreme

Optimal Consumption Rule and Budget Allocation

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

Hard

Positive Analysis Using Economic Data

This question is designed to assess your ability to use positive economic analysis based on empirica

Medium

Production Possibilities Curve (PPC) and Opportunity Costs

This question requires you to illustrate a production possibilities curve and calculate opportunity

Hard

Production Possibilities Curve (PPC) Interpretation

Analyze a production possibilities curve (PPC) to demonstrate understanding of efficient resource al

Easy

Resource Allocation and Decision-Making Across Economic Systems

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

Extreme

Scarcity and Opportunity Costs

This question examines the concepts of scarcity, opportunity cost, and trade-offs in economic decisi

Easy

The Role of Implicit and Explicit Costs

This question explores the distinctions between implicit and explicit costs, and how these costs inf

Easy
Unit 2: Supply and Demand

Analyzing the Effects of a Consumption Tax

A per-unit consumption tax of $5 is imposed on suppliers in a market with the original supply curve

Hard

Congestion in Urban Real Estate Development

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

Hard

Cross Price Elasticity: Substitutes vs. Complements

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

Easy

Domestic Market Outcomes under Tariff Policy

Evaluate the impact of an import tariff on a domestic market.

Hard

Double Shifts in Supply and Demand

This question analyzes the outcomes when both the supply and demand curves shift simultaneously. Ans

Hard

Double Shifts: Simultaneous Changes in Supply and Demand

Examine the market outcome when both supply and demand shift simultaneously. Answer the following pa

Hard

Effects of a Price Ceiling on Market Outcomes

A government sets a price ceiling below the current market equilibrium price in the housing market.

Hard

Effects of Subsidies on Supply and Welfare

This question explores how subsidies affect market outcomes. Answer the following: (a) Describe the

Medium

Effects of Supply-Side Taxes and Subsidies on Market Equilibrium

This question examines how government interventions in the form of taxes and subsidies affect market

Hard

Elasticity of Supply Calculation

This question requires you to calculate the price elasticity of supply and discuss the factors influ

Medium

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

Hard

Environmental Externality in Apparel Production

Factories producing apparel sometimes emit pollutants into waterways, imposing an environmental exte

Medium

Environmental Impact in Car Manufacturing

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

Hard

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

Medium

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:

Medium

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

Medium

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

Medium

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 +

Hard

FRQ 12: Double Shift Scenario in a Market

Suppose a new health study increases the demand for a nutritious beverage, shifting the demand curve

Hard

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

Hard

FRQ 13: Elasticity and Total Revenue Test

A firm observes that when it increases the price of its product from $$P = 10$$ to $$P = 12$$, the q

Medium

FRQ 13: Evaluating the Effects of Tariffs in the Steel Market

The United States imposes a tariff on imported steel. Answer the following: (a) Draw a supply and de

Hard

FRQ 14: Impact of Technological Advancements on the Tablet Market Supply

A new machine is introduced in the tablet industry that significantly lowers production costs. Answe

Easy

FRQ 19: Effects of Import Quotas in International Trade

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

Hard

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

Medium

Impact of Government-Imposed Price Floor in the Agricultural Market

A government has set a price floor for wheat at $3 per unit in an effort to support farmers. Prior t

Medium

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

Medium

International Trade: Tariffs and Quotas Impact

This question requires an analysis of government policies on international trade and their effects o

Hard

Market Disequilibrium and Adjustment Mechanisms

This question examines the concept of market disequilibrium and how markets adjust to eliminate shor

Medium

Market Disequilibrium: Shortages and Surpluses

Examine situations of market disequilibrium and the self-correcting mechanisms of supply and demand.

Medium

Market Shifts due to External Shocks

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

Medium

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

Hard

Price Elasticity of Demand Calculation

A firm observes the following data for the market demand of its product at different prices: | Pric

Medium

Price Elasticity of Supply Analysis

Evaluate the price elasticity of supply given a firm's output response to a change in price.

Medium

Price Elasticity of Supply and Its Implications

This question explores the concept of price elasticity of supply. You are asked to calculate it usin

Medium

Price Elasticity of Supply: Practical Applications

A farm report indicates that when the price of corn increases from $$\$4$$ to $$\$5$$ per bushel, th

Easy

Supply Elasticity and Producer Behavior

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

Medium

Supply Shift: Impact of Technology on Production

A technological innovation reduces production costs for suppliers in the market for Product Y. Analy

Medium

Taxation Impact on Market Equilibrium

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

Hard

Technological Improvements and the Supply Curve

Assess how improvements in technology affect the supply curve in a competitive market.

Easy

Water Contamination from Agricultural Pesticide Use

Excessive use of pesticides in agriculture can contaminate water supplies, imposing a negative exter

Hard
Unit 3: Production, Cost, and the Perfect Competition Model

Comprehensive Perfect Competition Market Analysis

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

Extreme

Comprehensive Profit Maximization under Perfect Competition

A firm in a perfectly competitive market faces the following conditions: its total cost function can

Extreme

Construction and Urban Dust Pollution

Construction activities in urban areas can cause dust pollution, which is a negative externality. An

Easy

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

Hard

Cost Functions and Marginal Cost Curve Calculation

A firm’s total cost function is given by $$TC(Q) = 5*Q + 3*Q^2 + 40$$. Analyze the cost structure ba

Medium

Cost Optimization with Fixed and Variable Inputs

A firm incurs a fixed cost of $$500$$ and experiences decreasing variable cost per unit as output in

Easy

Data Center Services and Energy Consumption Externality

Large data centers contribute to increased energy consumption, causing negative externalities that a

Hard

Economic and Accounting Profit Calculation

A firm has the following financial data for a given period as shown in the table below. Use this dat

Easy

Economies and Diseconomies of Scale Analysis

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

Hard

Efficiency Losses from Government Price Floors

A government imposes a price floor in the market for Good Y, resulting in a surplus. (a) Draw a gr

Hard

Entry and Exit in Perfect Competition (Long-run Analysis)

Consider a market where firms operate under perfect competition. The representative firm's total cos

Hard

Entry and Exit in Perfect Competition Analysis

A firm in a perfectly competitive market faces an average total cost (ATC) of $$25$$ per unit while

Medium

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

Easy

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

Hard

FRQ 3: Profit Maximization in a Competitive Market

Consider a competitive firm with a total cost function given by $$TC(Q) = 0.5*Q^2 + 50$$ Part A: D

Medium

FRQ 4: Profit Calculation and Types of Profit

Firm C produces 200 units of its product and sells each unit at a market price of $10. The firm incu

Medium

FRQ 8: Impact of New Technology on Production and Costs

A manufacturing firm introduces new machinery that increases the marginal product of labor (MPL) fro

Medium

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

Medium

FRQ 14: Cost Minimization in the Long Run

Consider a firm seeking to minimize its long-run costs. A graph showing the firm's LRATC curve is pr

Medium

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

Medium

FRQ 18: Cost Metrics Comparison: Average and Marginal Costs

A firm produces gadgets and has a total cost function described by $$TC(Q) = 200 + 4 * Q + 0.2 * Q^2

Hard

FRQ 19: Graph Interpretation: Perfect Competition Market Graph

The attached graph illustrates the market for a product in a perfectly competitive industry. Answer

Easy

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

Hard

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

Extreme

Impact of Factor Input Changes on the Production Function

A firm produces output using both capital and labor. The table below provides data for different com

Hard

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

Hard

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}$

Extreme

Long-Run Average Cost Curve and Economies of Scale Analysis

A firm’s long-run average total cost (LRATC) is represented by the following curve. Use the graph an

Hard

Long-Run Entry and Exit Decisions in Perfect Competition

In a perfectly competitive market, firms can enter or exit based on profit conditions. Suppose a fir

Medium

Long-run Production Costs and Scale Economies

A firm in the long run faces the cost function $$LRATC(Q) = 0.05*Q^2 - 0.8*Q + 30$$. Answer the foll

Hard

Marginal Product Calculation in Production

Compute the marginal product of labor (MPL) using the data provided and discuss the occurrence of di

Easy

Market Supply Determination from Firm‐Level Cost Functions

In a perfectly competitive market, the market supply curve is derived from the aggregation of indivi

Hard

Production Decisions Under Government Subsidies

A government subsidy of $$S = 2$$ per unit is provided to a firm whose original cost function is $$T

Medium

Production Function Analysis

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

Medium

Production Function Analysis and Diminishing Returns

A manufacturing firm produces widgets using labor as its only variable input. The production functio

Medium

Profit Maximization and MR = MC Analysis

Examine the profit maximization condition in a perfectly competitive market and solve for the profit

Medium

Profit Maximization in Perfect Competition

A competitive firm faces a market price of $$30$$ per unit. Its marginal cost (MC) function is given

Hard

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

Hard

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

Hard

Short-run Shutdown Decision in Perfect Competition

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

Medium

Short-run vs. Long-run Production Decisions

An electronics manufacturer experiences an unexpected surge in demand. Initially, some inputs are fi

Medium

Shutdown Rule in the Short Run

A firm operating in a competitive market faces a market price of $10. Its cost structure yields an A

Medium

Steel Production and Industrial Pollution

The production of steel in an industrial market generates pollution that imposes additional external

Extreme
Unit 4: Imperfect Competition

Advertising Expenditure and Market Demand Shifts

Examine how advertising expenditures affect the demand curve and market equilibrium in a monopolisti

Medium

Advertising, Demand Elasticity, and Pricing

Examine the effect of advertising on demand elasticity and pricing decisions in monopolistic competi

Medium

Analyzing Returns in Eco-Friendly Furniture

An eco-friendly furniture maker operates in an imperfectly competitive market. The firm has a fixed

Extreme

Barriers to Entry and Market Structure Dynamics

Discuss the role of barriers to entry in shaping market structures. Use real-world examples where ap

Easy

Calculating Output in a Price-Discriminating Monopoly

Analyze a price-discriminating monopolist's decision-making process and calculate optimal outputs an

Extreme

Collusion and Cartel Formation in Oligopolistic Markets

This question explores how collusion and cartel formation can influence market outcomes in an oligop

Hard

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

Hard

Comparative Analysis: Price Makers and Price Takers

Compare the roles and outcomes of price makers versus price takers in different market structures.

Easy

Comparative Efficiency in Monopolistic Competition vs. Monopoly

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

Hard

Consumer Surplus and Deadweight Loss in Imperfect Competition

Examine the welfare effects of market inefficiencies in imperfect competition.

Medium

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

Medium

Cost Curves and Inefficiencies in Imperfect Competition

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

Medium

Economies of Scale as Barriers to Entry

Economies of scale can create significant barriers to entry in imperfectly competitive markets. Anal

Medium

Effect of Input Cost Changes on Production in a Monopoly

This question explores how an increase in input costs affects a monopolist's marginal cost (MC) curv

Hard

Elasticity and Marginal Revenue in Monopoly Pricing

This question links the concepts of price elasticity of demand and marginal revenue (MR) in monopoly

Hard

Environmental Tax in the Car Manufacturing Market

To combat environmental pollution, the government has imposed a $3 per‐unit environmental tax on car

Medium

External Cost in the Pharmaceutical Market

A pharmaceutical company operating in an imperfectly competitive market generates negative externali

Extreme

FRQ 3: Oligopoly Game Theory Analysis

Two firms in an oligopolistic industry are considering whether to collude or compete. Their decision

Hard

FRQ 10: Third-Degree Price Discrimination in Monopolies

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

Extreme

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

Medium

FRQ 15: Stackelberg Leadership in Oligopoly

In an oligopolistic market, one firm acts as a leader while the other acts as a follower. The firms’

Extreme

Game Theory in Oligopoly Markets

This question examines strategic interactions among firms in an oligopoly using game theory. Analyze

Extreme

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

Hard

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

Hard

Government Intervention in Luxury Smartphone Accessories Market

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

Medium

Government Price Controls and Subsidies in Monopolistic Competition

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

Hard

Government Regulation of a Natural Monopoly Market

A water utility company operates as a natural monopoly due to high fixed costs and economies of scal

Medium

Impacts of Price Wars in Oligopolistic Markets

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

Hard

Interdependence in Oligopolistic Markets and the Kinked Demand Curve

Firms in oligopolistic markets are interdependent. Using the kinked demand curve model, analyze how

Medium

Market Entry and Exit in Monopolistic Competition

Discuss the dynamics of market entry and exit in monopolistic competition and their effects on long-

Medium

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

Medium

Monopoly Profit Maximization

Examine the profit-maximizing behavior of a monopolist.

Medium

Monopoly Regulation and Natural Monopoly Pricing

Consider a natural monopoly with high fixed costs that initially produces at the profit‐maximizing o

Hard

Oligopoly and Game Theory: Payoff Matrix Analysis

Examine the concepts of Nash equilibrium and dominant strategies in an oligopolistic market through

Medium

Price Discrimination and Deadweight Loss

A monopolist that charges a single uniform price faces deadweight loss due to higher pricing. Now su

Medium

Price Discrimination in Monopolistic Markets

This question examines a firm's use of price discrimination in a monopolistic market. Assume the fir

Medium

Price Discrimination Strategies in Imperfectly Competitive Markets

This question focuses on price discrimination in monopoly settings. You will explain the differences

Medium

Production Costs in Innovative Apparels

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

Extreme

Rising Input Costs in a Natural Monopoly

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

Medium

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

Medium

Tax Impact on Eco-Friendly Products Market

In the market for eco-friendly products, growing environmental concerns have prompted the government

Medium

Technological Change and Market Structure in Imperfect Competition

Analyze the impact of technological advancements on the cost structure and entry dynamics in imperfe

Hard

Technology Hardware Market Externalities

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

Hard

Third-Degree Price Discrimination and Welfare Effects

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

Hard

Welfare Analysis in Imperfectly Competitive Markets

Analyze the welfare implications of market power in imperfectly competitive markets, with a focus on

Extreme
Unit 5: Factor Markets

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

Hard

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

Easy

Calculating Marginal Revenue Product from Production Data

A firm’s hiring decision is based on the marginal revenue product (MRP) of labor. Using given produc

Easy

Calculation of Marginal Revenue Product and Marginal Factor Cost

This question involves analyzing a firm’s employment decision by calculating the marginal product of

Medium

Capital-Labor Substitution and the Least Cost Rule

Using a production function and the least cost rule, determine the optimal input combination under c

Extreme

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

Hard

Comparative Factor Markets in Different Industries

Different industries experience variations in the derived demand for labor based on product market c

Medium

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

Medium

Cost Minimization and the Least Cost Rule

A firm aims to minimize production costs while maintaining its output level by choosing the optimal

Medium

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

Medium

Derived Demand and Marginal Revenue Product in Factor Markets

A firm’s demand for labor is derived from the demand for its product, and the marginal revenue produ

Medium

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

Medium

Diminishing Marginal Returns and Hiring Decisions

A firm experiences diminishing marginal returns to labor as more workers are employed. (a) Explain t

Medium

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

Medium

Effects of Exogenous Wage Changes on Employment

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

Medium

Effects of Legal Interventions on Labor Market Costs

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

Hard

Effects of Universal Basic Income on Labor Supply

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

Hard

Factor Premium and Least Cost Input Combination

A firm uses both labor and capital in its production process. The cost minimizing condition is achie

Easy

Factor Supply: Impact on Wage Equilibrium

Consider a local labor market where the supply of labor is influenced by factors such as personal va

Medium

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.

Easy

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

Easy

Impact of Government Intervention on Labor Supply

This question explores how government policies, such as a minimum wage, affect the labor supply in a

Medium

Impact of Minimum Wage on Competitive Factor Markets

Government intervention in factor markets, such as setting a minimum wage, can alter market outcomes

Hard

Impact of Technological Change on Labor Demand

This question investigates the effects of technological change on labor demand and the resulting cha

Easy

Impact of Technological Change on Labor Productivity and Derived Demand

A manufacturing firm experiences a technological innovation that increases worker productivity. Init

Hard

Labor Demand Response

A firm’s initial marginal product of labor is 25 units and its product sells for $10 each. A new sof

Medium

Labor Market Equilibrium and Elasticities

This question evaluates your understanding of labor market equilibrium and elasticity measures.

Hard

Labor Market Equilibrium with Derived Demand

This question focuses on deriving equilibrium wage and employment levels from labor supply and deriv

Medium

Labor Supply Elasticity and Wage Changes

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

Hard

Long-Run Adjustments in Competitive Factor Markets

This question requires analysis of the adjustments in a perfectly competitive factor market as new f

Extreme

Long-Run Adjustments in Factor Markets

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

Medium

Manufacturing and Community Health

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

Hard

Monopsony vs Competitive Market Wage Differentiation

Compare the outcomes of a monopsonistic labor market with those of a perfectly competitive labor mar

Hard

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

Hard

Negative Externality in Retail Sector

A new shopping mall development leads to increased traffic congestion and local air pollution, repre

Extreme

Negative Externality in Textile Production

A textile factory’s production process releases pollutants that impose additional costs on nearby re

Easy

Negative Spillover in Chemical Production

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

Hard

Profit Maximization in Factor Markets: Equating MRP and MFC

A firm in a perfectly competitive labor market uses labor as an input. Its production function yield

Hard

Profit Maximization in Multi-Factor Production

A smartphone manufacturing company has the production function $$Q = L^{0.5} * K^{0.5}$$. The sellin

Extreme

Profit Maximization in Perfectly Competitive Factor Markets

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

Easy

Profit-Maximizing Labor in a Competitive Market

A firm in a perfectly competitive labor market is guided by the marginal revenue product (MRP) of la

Medium

Returns to Scale and Labor Demand

This question explores the relationship between returns to scale and the marginal revenue product of

Hard

Short-run vs. Long-run Factor Decisions

This question explores the differences between short-run and long-run factor employment decisions, f

Medium

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

Hard

Skill-Biased Technological Change and Labor Market Outcomes

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

Medium

Understanding Factor Markets and Derived Demand

Define 'Factor Markets' and 'Derived Demand'. (a) Provide concise definitions for each term. (b) Ill

Easy

Welfare Implications of Monopsonistic Labor Markets

Monopsonistic labor markets often result in inefficiencies compared to competitive markets. Analyze

Hard
Unit 6: Market Failure and the Role of Government

Analyzing Price Ceilings in Monopolistic Competition

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

Hard

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

Medium

Antibiotic Overuse and External Costs: Addressing Resistance

The overuse of antibiotics in healthcare can lead to antibiotic resistance, a negative externality t

Medium

Comparative Analysis: Lump-Sum Tax vs. Per-Unit Tax

A competitive firm operates with a total cost function $$TC(Q) = 100 + 3*Q + Q^2$$. Compare the impa

Medium

Comparing Lump-Sum Taxes and Per Unit Taxes

A firm faces two different types of taxes: a lump-sum tax and a per unit tax.

Medium

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

Hard

Comparing Private and Social Costs in Externalities

Examine the difference between private cost (MPC) and social cost (MSC) in the presence of externali

Medium

Congestion Externality in Urban Transportation

Heavy car usage during rush hour leads to congestion, which imposes additional time and monetary cos

Easy

Cost-Benefit Analysis of an Environmental Regulation

A government regulation requires factories to install pollution filters at a cost of $$30$$ per unit

Hard

Determining Socially Efficient Output in a Market with Negative Externalities

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

Hard

Dynamic Analysis of Externality Correction over Time

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

Extreme

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

Medium

Evaluating the Efficacy of Anti-Poverty Programs in Reducing Inequality

A government has implemented various anti-poverty programs such as income transfers, scholarships, a

Extreme

Evaluating the Efficiency of Public Expenditures for Public Goods

This FRQ assesses the efficiency of public expenditures aimed at providing public goods. Using the p

Easy

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

Medium

FRQ 3: Correcting a Positive Externality with a Subsidy in the Education Market

In the market for education services, positive externalities result in underproduction relative to t

Medium

FRQ 9: Progressive Taxation and Income Inequality

Discuss how progressive taxation can reduce income inequality in an economy. Use graphical analysis

Medium

FRQ 11: Comparing Taxation and Subsidies for Negative Externalities

Evaluate the effectiveness of taxes versus subsidies in correcting negative externalities. Compare t

Extreme

FRQ 15: Government Intervention to Address Pollution Externalities

Consider a market where production creates pollution, introducing a negative externality. Analyze ho

Hard

FRQ 17: Anti-Trust Policies and Market Efficiency

Analyze how anti-trust policies can improve market efficiency by reducing market power.

Medium

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.

Medium

Government Intervention in a Labor Market: Minimum Wage Effects

This FRQ explores the effects of imposing a minimum wage in a labor market. Using the graph provided

Medium

Government Regulation in Response to Negative Externalities: Pollution Control

This FRQ examines how government regulation, such as a per-unit tax, can address negative externalit

Hard

Impacts of Non-Price Regulation on Manufacturing Costs

A manufacturing industry faces new non-price regulations, such as stricter emission standards. Answe

Medium

Internalizing Positive Externalities via Subsidies

In a market with positive externalities, the private marginal benefit (MB) is lower than the social

Hard

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

Medium

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

Extreme

Market Failure from Asymmetric Information

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

Easy

Market Failure in Imperfect Competition Due to Market Power

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

Hard

Market Power and Antitrust Regulation: A Comparative Analysis

Evaluate how market power in a monopolistic market leads to inefficiency and how antitrust policies

Extreme

Negative Externality in Automobile Fuel Production

Consider the market for automobile fuel. In this market, firms face a private marginal cost (MPC) bu

Medium

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

Hard

Price Ceiling Impact on a Competitive Market

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

Hard

Public Health and Government Subsidy Analysis

Analyze the impact of a per unit subsidy on the market for vaccinations. The market is described by

Medium

Public vs. Private Goods and the Free-Rider Problem

Compare and contrast public and private goods, and analyze the free-rider problem associated with pu

Easy

Quantifying Deadweight Loss from a Per-Unit Tax in a Competitive Market

Consider a perfectly competitive market with the following functions: Demand: $$P = 100 - 2*Q$$ and

Extreme

Regulatory Measures and Pollution Spillovers

Industrial pollution can generate spillover effects that harm nearby communities. Consider the follo

Medium

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

Hard

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

Medium

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FAQWe thought you might have some questions...
Where can I find practice free response questions for the AP Microeconomics exam?
The free response section of each AP exam varies slightly, so you’ll definitely want to practice that before stepping into that exam room. Here are some free places to find practice FRQs :
  • Of course, make sure to run through College Board's past FRQ questions!
  • Once you’re done with those go through all the questions in the AP MicroeconomicsFree Response Room. You can answer the question and have it grade you against the rubric so you know exactly where to improve.
  • Reddit it also a great place to find AP free response questions that other students may have access to.
How do I practice for AP AP Microeconomics Exam FRQs?
Once you’re done reviewing your study guides, find and bookmark all the free response questions you can find. The question above has some good places to look! while you’re going through them, simulate exam conditions by setting a timer that matches the time allowed on the actual exam. Time management is going to help you answer the FRQs on the real exam concisely when you’re in that time crunch.
What are some tips for AP Microeconomics free response questions?
Before you start writing out your response, take a few minutes to outline the key points you want to make sure to touch on. This may seem like a waste of time, but it’s very helpful in making sure your response effectively addresses all the parts of the question. Once you do your practice free response questions, compare them to scoring guidelines and sample responses to identify areas for improvement. When you do the free response practice on the AP Microeconomics Free Response Room, there’s an option to let it grade your response against the rubric and tell you exactly what you need to study more.
How do I answer AP Microeconomics free-response questions?
Answering AP Microeconomics free response questions the right way is all about practice! As you go through the AP AP Microeconomics Free Response Room, treat it like a real exam and approach it this way so you stay calm during the actual exam. When you first see the question, take some time to process exactly what it’s asking. Make sure to also read through all the sub-parts in the question and re-read the main prompt, making sure to circle and underline any key information. This will help you allocate your time properly and also make sure you are hitting all the parts of the question. Before you answer each question, note down the key points you want to hit and evidence you want to use (where applicable). Once you have the skeleton of your response, writing it out will be quick, plus you won’t make any silly mistake in a rush and forget something important.