AP Microeconomics FRQ Room

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

Cost-Benefit Analysis in Investment Decisions

This question examines cost-benefit analysis in business decisions. Answer every part.

Economic Systems and Resource Allocation

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

Evaluating Trade-Offs in Personal Decision Making

Examine how individuals face trade-offs and opportunity costs when making personal decisions, such a

FRQ 1: Scarcity and Opportunity Cost

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

FRQ 2: Production Possibilities Curve (PPC) Analysis

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

FRQ 6: Market Analysis – Supply and Demand Shifts

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

FRQ 13: Market Failures – Externalities and Public Goods

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

Graphical Analysis of Market Shifts due to Resource Scarcity

Analyze how resource scarcity affects market equilibrium using a supply and demand framework.

Impact of Scarcity on Innovation: A Case Study

Evaluate how scarcity of critical resources affects a firm's innovation and production strategies.

Implicit vs. Explicit Costs in Business Decision-Making

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

Labor vs. Capital: Analyzing Factors of Production

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

Managerial Decision-Making and Opportunity Costs

This question explores the role of opportunity cost in managerial decision-making. (a) Define oppor

Marginal Analysis and Diminishing Returns

Apply marginal analysis to determine the point of diminishing marginal utility and discuss its impli

Marginal 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 Externalities and Government Intervention

This question focuses on analyzing a market with a negative externality, calculating welfare losses,

Opportunity Cost and Trade-offs in Policy Decisions

This question investigates the concepts of opportunity cost and trade-offs in government policy deci

Optimal Consumption Bundles Through Marginal Utility Per Dollar Analysis

Assess how consumers determine their optimal consumption bundles by equalizing marginal utility per

Positive vs. Normative Economics Analysis

Analyze the difference between positive and normative economics and evaluate their roles in economic

Price Elasticity of Demand and Revenue Implications

This question examines price elasticity of demand and its effects on total revenue using empirical d

Production Possibilities Curve (PPC) Analysis

Analyze the Production Possibilities Curve (PPC) and explain how it represents opportunity costs in

Production Possibilities Curve (PPC) Interpretation

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

Production Possibilities Curve Analysis

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

Resource Allocation Efficiency

This question explores the concepts of productive and allocative efficiency as they relate to resour

Scarcity and Decision Making

This question examines the basic economic concept of scarcity and the resulting need for choices. An

Scarcity and Opportunity Cost Analysis

This question examines the concept of scarcity and the idea of opportunity cost in economic decision

Scarcity and Opportunity Cost: Decision Making Basics

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

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

Technological Advancements and Economic Growth Analysis

Technological innovation can spur economic growth. Suppose a breakthrough in renewable energy techno

Analyzing Demand Shifts in a Local Market

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

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

Calculating Deadweight Loss from Taxation

Analyze the inefficiency created by a per-unit tax in a market by calculating the deadweight loss.

Comparative Analysis of Demand and Supply Elasticities

Compare and contrast the determinants of elasticity for demand and supply, and use numerical data to

Consumer and Producer Surplus Analysis with Demand and Supply Shifts

Examine how a change in market conditions, such as a shift in demand or supply, affects consumer and

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 Essential Medicines Market

To ensure affordability of essential medicines, the government imposes a price ceiling at $35 in a m

Effects of a Price Ceiling on Market Outcomes

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

FRQ 2: Supply Response in the Automotive Tire Market

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

FRQ 3: Price Elasticity of Demand for Organic Produce

A local organic produce market observes changes in the quantity demanded of organic apples as the pr

FRQ 4: Calculating Price Elasticity of Demand and its Impact on Total Revenue

A local restaurant charges $10 for a specific dish and sells 100 plates per day. After reducing the

FRQ 4: Price Elasticity of Supply in a Local Bakery

A local bakery adjusts its production based on price changes. The following data represents the quan

FRQ 7: Calculating Income Elasticity of Demand

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

FRQ 10: Evaluating Deadweight Loss due to Price Ceiling in the Rental Housing Market

Consider a rental housing market with an equilibrium rent of $1200 per month. A government-imposed p

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

FRQ 15: Short-Run vs Long-Run Supply Elasticities

Consider a market where the production of a commodity is difficult to adjust in the short-run but ea

FRQ 18: Variable Elasticity Across Price Ranges

Consider a good that exhibits different elasticities in separate price ranges. The following tables

Hazardous Waste in Electronics Manufacturing

Electronics manufacturing can produce hazardous waste that creates significant environmental damage.

Impact of Government-Imposed Price Ceiling in the Residential Rental Market

A government has imposed a price ceiling in the residential rental market aimed to keep rents afford

Impact of Price Ceilings on Markets

This question focuses on the effects of price ceilings. Answer the following: (a) Define what a pri

Interpreting Supply Shifts due to Changes in Input Costs

Analyze the impact of an increase in the cost of raw materials on the supply curve in a competitive

Law of Diminishing Marginal Utility and the Demand Curve

Discuss how the law of diminishing marginal utility contributes to the downward-sloping nature of th

Long Run vs Short Run Elasticity: Comparative Analysis

This question asks you to compare short-run and long-run price elasticity of supply through definiti

Market Disequilibrium: Shortages and Surpluses

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

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.

Monopolist Output, Revenue, and Price Discrimination

This question examines a monopolist's decision-making process regarding output and pricing, includin

Negative Externality in Industrial Fishing

Overfishing not only depletes fish stocks but also causes negative external impacts such as by-catch

Noise Externality in Restaurant Operations

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

Noise Pollution in the Outdoor Concert Market

Outdoor concerts generate noise that negatively affects nearby residents. In this market, the equili

Price Elasticity vs. Income Elasticity Comparison

This question requires you to compare and contrast price elasticity of demand and income elasticity

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 Analysis and Market Response

This question examines the basic concept of supply, the effects of technological change on productio

Supply Shocks: Effects of a Technological Improvement

A technological advancement reduces production costs in an industry. The initial supply and demand c

Urban Congestion from Ride-Hailing Services

Ride-hailing services in a busy city contribute to increased traffic congestion and pollution. The e

Adjustment to Increased Capital Rental Rate

A firm uses both capital and labor in its production. The rental rate for capital increases from $10

Analysis of Diminishing Marginal Returns in the Short Run

Consider a firm with a short-run production function given by $$Q = 50 + 20*L - L^2$$, where L repre

Bottled Water Production and Plastic Waste

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

Calculating the Shutdown Point

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

Comparative Statics: Changes in Input Prices

A firm’s short-run total cost is given by $$TC = 30 + 6*Q + Q^2$$. Suppose a rise in the wage rate c

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.

Data Center Services and Energy Consumption Externality

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

Derivation of Cost Functions

A firm's total cost is composed of fixed and variable costs. Derive the total cost function and anal

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

Economic vs. Accounting Profit with Implicit Costs

A firm reports revenue of $$1200$$, explicit costs of $$900$$, and incurs an implicit cost of $$200$

Effects of Technological Improvements on Production and Costs

A firm invests in new technology that increases the marginal product of labor by 50% across all leve

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

Fossil Fuel Energy Production and Pollution

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

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: Exit Rule and Long-Run Equilibrium in Perfect Competition

Firm E is operating at an output level of Q = 100 with an Average Total Cost (ATC) of $18, while the

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 11: Short-Run vs. Long-Run Production Decisions

A firm operates with a total cost function given by $$TC(Q) = 50 + 6 * Q + 0.5 * Q^2$$. Due to a dro

FRQ 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 14: Graphing the Production Function

A firm’s production function is given by $$Q = 8 * L - (L^2)/2$$, where L represents the units of la

FRQ 17: Marginal Cost and Revenue in Competitive Firms

In a perfectly competitive market, a firm’s output decision is determined by comparing marginal cost

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

Graphing Average and Marginal Cost Curves

Construct a diagram that includes the Average Total Cost (ATC), Average Variable Cost (AVC), and Mar

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

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

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

Long‐Run Market Equilibrium and Entry/Exit

In a perfectly competitive market with free entry and exit, firms earn economic profits or losses in

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

Market Supply Determination from Firm‐Level Cost Functions

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

Mining and Environmental Degradation

Mining activities can cause significant environmental degradation, which is a negative externality n

Multi-Stage Production Decision and Profit Maximization

A firm operates with a total cost function of $$TC(Q) = 5 + 10*Q + Q^2$$. Answer the following quest

Perfect Competition Market Graph Analysis

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

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 Maximization in Perfect Competition

Consider a firm in a perfectly competitive market with a total cost function given by $$TC(Q) = 100

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

Barriers to Entry in Various Market Structures

The degree of barriers to entry distinguishes market structures. Using the table provided, answer th

Comparative Analysis of Allocative Efficiency in Market Structures

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

Comparing Pricing Strategies across Market Structures

Different market structures lead to distinct pricing strategies and efficiency outcomes. Answer the

Comparing Profit Maximization in Monopoly vs. Perfect Competition

Contrast the profit-maximization strategies of a monopoly with those of a firm in a perfectly compet

Consumer Surplus and Deadweight Loss in Imperfect Competition

Examine the welfare effects of market inefficiencies in imperfect competition.

Effects of Tax in the Fashion Apparel Market

The fashion apparel market, characterized by product differentiation and imperfect competition, face

Externalities and Market Inefficiencies in the Online Streaming Sector

An online streaming service, operating in an imperfectly competitive market, creates negative extern

FRQ 5: Advertising Effects on Demand Elasticity in Monopolistic Competition

A monopolistically competitive firm launches an advertising campaign aimed at reducing the price ela

FRQ 9: Price Cap Regulation in a Natural Monopoly

A natural monopoly has a total cost function $$TC = 200 + 20*Q$$ and faces the demand function $$P =

FRQ 19: Non-Price Competition through Advertising

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

Government Intervention in Luxury Smartphone Accessories Market

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

Government Price Controls and Subsidies in Monopolistic Competition

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

Government Regulation of Natural Monopolies

This question explores the existence of natural monopolies and examines government interventions aim

Government Tax in the Fitness Club Industry

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

Impact of a Per-Unit Subsidy in Monopolistic Competition

In a monopolistically competitive market, the government introduces a per‐unit subsidy to boost prod

Impact of Advertising in Monopolistic Competition

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

Impact of Price Floors in Monopolistic Competition

This question focuses on the effects of imposing a price floor in a monopolistically competitive mar

Market Dynamics in Monopolistic Competition

Describe the process by which monopolistic competition shifts from short-run profit to long-run norm

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

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 Externality in the Craft Brewery Industry

A local craft brewery in an imperfectly competitive market faces negative externalities due to incre

Market Structures and Innovation: Role of Economies of Scale

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

Monopoly Profit Maximization and Regulation

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

Negative Environmental Externality in the Textile Industry

A textile firm in an imperfectly competitive market produces fabrics but generates negative external

Oligopoly and Game Theory: Payoff Matrix Analysis

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

Price Discrimination in Monopolistic Markets

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

Price Discrimination: Data Analysis and Calculations

Investigate the application of first-degree price discrimination using consumer data.

Price Elasticity and Price Discrimination Strategies

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

Product Differentiation in Monopolistic Competition

Product differentiation is a key feature of monopolistic competition. Analyze how differentiation af

Production Analysis at Urban Prints

Urban Prints is a small printing business operating in an imperfectly competitive market. The firm h

Profit Maximization in Virtual Reality Experiences

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

Tax Impact on Eco-Friendly Products Market

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

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

Taxation Impact in an Oligopolistic Market

In an oligopolistic market where only a few firms dominate, assume that the underlying market can be

Taxation in a Market with Economies of Scale: High-Tech Gadgets

High-tech gadgets are produced in a market where economies of scale are present, and the competitive

Taxation in a Monopolistic Competition: High-End Restaurant Market

In a major city, the high-end restaurant market is an example of monopolistic competition. The gover

Technology Hardware Market Externalities

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

Working with Marginal Costs in a Startup Cafe

A startup cafe operates in an imperfectly competitive market. The cafe incurs a fixed cost of $200,

Adjustment in Factor Demand Due to a Product Demand Shock

A firm experiences a downward shock in product demand causing the product price to fall from $30 to

Analysis of Monopsony: Wage Determination and Employment

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

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 Impact of Training Subsidies on Labor Supply

This question explores how a government training subsidy, aimed at increasing worker skills, affects

Application of the Least Cost Rule for Capital-Labor Substitution

A firm produces output using both labor and capital. It faces a wage rate of $20 per hour and a rent

Application of the Least Cost Rule in Factor Markets

A firm uses both labor and capital as inputs in its production process. It faces the following data:

Budget Constraints and Factor Markets

This question integrates isocost and isoquant analysis to determine the cost-minimizing combination

Calculation of Marginal Revenue Product and Marginal Factor Cost

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

Changes in Derived Demand due to Technological Advances

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

Changes in Factor Demand: Product Market Shifts

A firm experiences an increase in product demand, which affects its derived demand for labor. (i) E

Comparative Analysis of Perfect Competition and Monopsony in Labor Markets

Consider two labor market scenarios. In a perfectly competitive market, the equilibrium wage is $$w

Cost Minimization and Factor Substitution in Production

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

Cost Minimization and 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 Profit Maximizing Labor Using Production Data

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

Diminishing Marginal Returns and Hiring Decisions

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

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

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

Evaluating Factor Markets Under Uncertainty

This question examines how uncertainty regarding future product demand affects a firm's hiring decis

Factor Endowments and Comparative Advantage in International Trade

This question links factor markets to international trade by analyzing national differences in facto

Factor Market Equilibrium under Demand and Supply Shifts

A new government policy increases the minimum wage, while at the same time an innovation boosts work

Factor Supply: Impact on Wage Equilibrium

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

Government Intervention and Factor Market Outcomes

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

Graphical Analysis of Factor Market Equilibrium

A firm collects data on wages and employment to analyze its labor market. Using the provided data se

Impact of a Wage Subsidy on Factor Market Outcomes

The government introduces a wage subsidy for low-income workers, effectively reducing the cost of la

Impact of 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 Subsidy on Labor Market Dynamics

A government subsidy for worker training increases worker productivity, thereby affecting the derive

Impact of Minimum Wage on Competitive Factor Markets

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

Impact of Productivity Increases on Labor Demand

A firm experiences a technological innovation that increases worker productivity. Analyze the effect

Impact of Technology on Labor Demand

A firm adopts new technology that increases labor productivity. Analyze the effects of this technolo

Industrial Production and Environmental Costs

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

Labor Demand Adjustments in an Agricultural Context

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

Labor Market Equilibrium and Elasticities

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

Labor Market Equilibrium with Derived Demand

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

Labor Supply Elasticity and Wage Changes

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

Least Cost Input Combination

Analyze how the least cost rule guides a firm's decision in combining labor and capital.

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 Competitive Factor Markets

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

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

Minimum Wage Effects in Competitive and Monopsonistic Markets

Analyze the effects of imposing a binding minimum wage on employment in both competitive and monopso

Minimum Wage Effects in Different Market Structures

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

Monopsony vs Competitive Market Wage Differentiation

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

Multi-Factor Market Payoff and Equilibrium Analysis

This question integrates strategic interactions with factor market decisions by examining a payoff m

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 Hospitality Industry

A hotel chain’s expansion in a residential area causes increased congestion and noise, which imposes

Negative Externality in Mining Operations

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

Negative Externality in Retail Sector

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

Profit Maximization in Multi-Factor Production

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

Profit Maximization in Perfectly Competitive Factor Markets

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

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

The Role of Marginal Factor Cost in Employer Hiring Decisions

This question examines how a firm evaluates the marginal factor cost (MFC) when hiring under an upwa

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 Differentials and Human Capital

Examine the factors contributing to wage differentials between skilled and unskilled labor, and anal

Wage Rigidity, Unemployment, and Factor Markets

Wage rigidity, arising from long-term contracts and minimum wage laws, can lead to unemployment in t

Water Consumption in Beverage Industry

A beverage company uses large quantities of water in its production process, leading to environmenta

Welfare Implications of Monopsonistic Labor Markets

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

Addressing Underinvestment in Education with Subsidies

Education generates positive externalities leading to underinvestment in the absence of government i

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 Price Floors and Agricultural Surplus

A government sets a price floor in the agricultural market for corn to support farmers.

Analyzing the Impact of Subsidies on Equilibrium in a Monopolistically Competitive Market

This FRQ investigates the effect of a per-unit subsidy on equilibrium outcomes in a monopolistically

Antibiotic Overuse and External Costs: Addressing Resistance

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

Antitrust Policies and Market Efficiency Improvement

Antitrust policies are enacted to reduce market power and promote competitive markets. Answer the fo

Antitrust Policy and Market Efficiency in Monopolistic Competition

Discuss how market power in monopolistic competition can lead to inefficiency and how antitrust inte

Carbon Tax and Environmental Externalities

This FRQ analyzes how a carbon tax can correct the market failure from negative environmental extern

Comparing Lump-sum Taxes and Per Unit Taxes

Compare and contrast the economic impacts of lump-sum taxes versus per unit taxes in a competitive m

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

Correcting Negative Externalities in the Cigarette Market

The cigarette market suffers from a negative externality due to adverse health impacts from smoking.

Deadweight Loss Correction in Manufacturing with Externality

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

Determining Elasticities and Their Policy Implications in Retail Markets

This FRQ requires the calculation of own-price and cross-price elasticities for retail products and

Economic Efficiency vs. Equity: Trade-Offs in Progressive Taxation

Progressive taxation is used to redistribute income and address inequality, but it may also lead to

Effects of 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

Environmental Regulation and Firm Cost Structures

A non-price regulation aimed at protecting the environment increases a firm’s costs. Analyze how thi

Evaluating Regulation’s Impact on Market Structure

Examine how non-price regulations, such as environmental standards, can impact market outcomes in a

Evaluating Wage Subsidies versus Minimum Wages

Consider two policies aimed at improving labor market outcomes: a minimum wage and a wage subsidy. A

Externality from Pesticide Use in Agriculture

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

FRQ 7: Efficiency Effects of Subsidies in a Market with Positive Externalities

Consider a market with positive externalities, where private markets underproduce relative to the so

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 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

Government Intervention in External Markets: Case Study Analysis

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

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

Impact of Lump Sum vs. Per Unit Taxes on Firms

Firms operate under different types of tax regimes. Analyze the effects of a lump sum tax compared t

Internalizing Positive Externalities via Subsidies

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

Market Failure in Imperfect Competition Due to Market Power

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

Market Power and Antitrust Policies

Evaluate the role of market power in creating socially inefficient outcomes and analyze how antitrus

Market Power and Antitrust Regulation: A Comparative Analysis

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

Market Power, Monopolies, and Antitrust Policy

Consider a monopolistic firm operating in the market for Good Z, where its market power leads to dev

Measuring Income Inequality: The Lorenz Curve and Gini Coefficient

Analyze income inequality by constructing a Lorenz curve and calculating the Gini coefficient using

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 Policy in Labor Markets

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

Negative Externality in Water Pollution from Irrigation

Excessive fertilizer use in irrigation can lead to water pollution, a negative externality affecting

Non-price Regulation and Market Efficiency

A polluting industry is subject to non-price regulation in the form of mandated emission standards.

Positive Externality in Research and Development Investment

Investment in research and development (R&D) projects often yields benefits that spill over to socie

Price Ceiling Effects in Monopolistic Competition

Investigate how a binding price ceiling might affect a firm operating under monopolistic competition

Public Goods and the Free-Rider Problem in National Defense

Public goods like national defense are often underprovided in free markets due to the free‐rider pro

Public Goods Provision and the Free-Rider Problem

This FRQ explores why public goods are underprovided in a free market and the role of the free-rider

Public Health and Government Subsidy Analysis

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

Public vs. Private Goods and the Free Rider Problem

Differentiate between public and private goods and explore the inefficiencies caused by the free rid

Short-Run Versus Long-Run Effects of Government Intervention

This FRQ contrasts the short-run and long-run effects of government intervention on a firm's product

Taxation and Income Distribution: Progressive vs. Regressive Taxes

Different tax structures can have significant effects on income distribution.

Underprovision of Public Goods and Government Subsidies

Public goods are often underprovided in free markets due to the free rider problem. Answer the follo

Urban Air Pollution and Market Failure

Urban air pollution is a significant negative externality resulting from high levels of industrial a