Course Description
The purpose of AP
Microeconomics is to give students a thorough understanding of the principles
of economics that apply to the functions of individual decision makers, both
consumers and producers, within the economic system. It places primary emphasis
on the nature and functions of product markets and includes the study of factor
markets and of the role of government in promoting greater efficiency and
equity in the economy. The following is a brief discussion of these topics and
some aspects of them that a teacher may choose to explore.
Topic Outline
I. Basic Economic Concepts . (8–14%)
A. Scarcity, choice and opportunity cost
B. Production possibilities curve
C. Comparative advantage, absolute advantage,
specialization and trade
D. Economic systems
E. Property rights and the role of incentives
F. Marginal analysis
II. The Nature and Functions
of Product Markets (55–70%)
A. Supply and demand (15–20%)
1. Market equilibrium
2. Determinants of supply and demand
3. Price and quantity controls
4. Elasticity
a. Price, income and
cross-price elasticities of demand
b. Price elasticity of supply
5. Consumer surplus, producer surplus and market
efficiency
6. Tax incidence and deadweight loss
B. Theory of consumer choice (5–10%)
1. Total utility and marginal utility
2. Utility maximization: equalizing marginal
utility per dollar
3. Individual and market demand curves
4. Income and substitution effects
C. Production and costs (10–15%)
1. Production functions: short and long run
2. Marginal product and diminishing returns
3. Short-run costs
4. Long-run costs and economies of scale
5. Cost minimizing input combination
D. Firm behavior and market structure (25–35%)
1. Profit:
a. Accounting versus economic
profits
b. Normal profit
c. Profit maximization: MR=MC
rule
2. Perfect competition
a. Profit maximization
b. Short-run supply and
shutdown decision
c. Behavior of firms and
markets in the short run and in the long run
d. Efficiency and perfect
competition
3. Monopoly
a. Sources of market power
b. Profit
maximization
c. Inefficiency
of monopoly
d. Price
discrimination
e. Natural monopoly
Objectives
Students
will be able to:
1. Demonstrate
economic questioning and analysis skills.
2.
Interpret a variety of graphical models and
paraphrase economic concepts.
3.
Analyze the development of modern economic theory.
4.
Explain the basic connections between economics and
calculus.
5.
Use and interpret the language of business and basic
measurements of economics performance.
6.
Apply economic skills and concept knowledge to higher
college-level economic courses.
Required Books/Resources
Ø
Textbook: Bade,
Robin and Michael Parkin. Foundations of
Economics, 5th ed. New York: Pearson, 2011.
Ø
Morton, John S. Advanced
Placement Economics: Microeconomics. New York, NY: National Council on
Economic Education, 2003. Two books: Student Activities and Teacher
Resources Manual.
Ø
Studenmund, A. H., Richard L. Stroup, and James D.
Gwartney. Coursebook to Accompany Economics: Private and Public Choice. Fort
Worth: Dryden Press, 2005. (Special topics are used for research projects.)
Ø
Workbook: Bade
& Parkin. Foundations of Economics
Workbook.
Ø
Workbook: Baron’s
AP Microeconomics/Macroeconomics.
Baron’s Educational Series, 2009.