Score Higher on AP Microeconomics 2024: Tips for FRQ 2 & 3

FRQ 2-3 – Short

This guide organizes advice from past students who got 4s and 5s on their exams. We hope it gives you some new ideas and tools for your study sessions. But remember, everyone's different—what works for one student might not work for you. If you've got a study method that's doing the trick, stick with it. Think of this as extra help, not a must-do overhaul.

📌 Overview

• Students make assertions about economic concepts, explain principles or models, make mathematical calculations, and create or answer questions about graphs or visual representations
• 17% of Exam Score.
• 2 Questions, each worth about 8.5% of the total exam score.
• Spend about 15 minutes per question.

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💭 General Advice

Tips on mindset, strategy, structure, time management, and any other high level things to know

• Identify/differentiate the specific concept or even unit by looking at keywords and the graph if you’re provided with one.
• Make sure you know where fair-return, socially optimal, productively efficient, and unregulated points are on a graph! The College Board tends to include them in questions.
• Speed is crucial! Make sure to get comfortable with quickly drawing key graphs (ex. supply and demand curves, cost curves, etc.) and labeling all key points such as equilibrium, surplus, shortage, and deadweight loss.
• Capitalize on your understanding of opportunity cost for questions on policies, market changes like equilibrium, resource allocation, and cost-benefit analysis.
  • For example, if a question asks about a government’s economic policy and economic choice, indicate that you understand how allocating resources for a public project might affect the private sector.
• Remember, when you spend resources on one thing, those resources are NOT available somewhere else.
• Know the four types of externalities (production and consumption, positive and negative). Your teacher may have only taught you two of them, but the AP exam differentiates them even more to four.

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✏️ Before you Write

What should a student do in the first few minutes, before they start writing?

• Extract and organize values from long word problems and then ensure you understand 100% what is being asked of you.
• If provided a graph, or table of the sort, analyze its patterns and trends, which is especially important when the patterns aren’t conventional (ex. If something usually tends to be increasing but instead is constant and you miss it because you’re so used to it being increasing).
• When looking at data, track increases and decreases to catch any diversions from typical trends.

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🏛️ Structuring your Response

• Even if a question only asks you to plot something on a graph, still do a short response explaining your thinking process behind it.
• Know the basic AP task verbs (identify, explain, calculate, draw, show, etc.) and structure responses based on those standards.
  • Ex. Predictive questions with no task verb to “explain” require less writing (1 sentence) rather than those who include the task verb (2-4 sentences).

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➗ Most Common Equations

• $\text{Profit}= \text{Total Revenue} - \text{Total Cost}$
• MC = MR → profit maximization quantity
• Least Cost Rule: $\frac{\text{MP}_{\text{Capital}}}{\text{P}_{\text{Capital}}} = \frac{\text{MP}_{\text{Labor}}}{\text{P}_{\text{Labor}}}$
• $\text{ATC}= \text{AVC} + \text{AFC}$
• Price Elasticity of Demand $= \frac{\%\Delta Q \text{ Demanded}}{\%\Delta \text{ Price}}$
• Total Revenue Test: if P rises and TR increases, the demand curve is inelastic (if the two are going in opposite directions, the demand curve is elastic)
• The unit elastic portion of the demand curve is where MR = 0
• Socially Optimal Level of Output (Allocative efficiency): MSB = MSC, P = MC
• $\text{AVC} = \frac{\text{Total Cost}}{\text{Quantity of Output}}$
• $\text{Income elasticity} = \frac{\%\Delta Q}{\%\Delta \text{Income}}$
  • Positive elasticity coefficient = normal good
  • Negative elasticity = inferior good

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📊 Drawing Graphs

• When two graphs are involved, be sure to label both of them.
• Label the axis as soon as you start drawing the graph because it is easy to forget later on.
• Draw arrows to indicate shifts.
• Label quantities and prices!
• If a price/wage taker, make sure to draw the market graph along with the firm graph.
• When drawing the ATC (average total cost) curve, make sure it slopes downward until it hits the MC (marginal cost) curve, and then begins to slope upward.
• Once the graph is completed, even if the question did not explicitly ask for you to do so, ensure that each curve is labeled.
• There are lots of triangles & irregular shapes that could be shaded, so pause and check if the question wants you to find surplus or deadweight loss (DWL).
  • Quick tip: on a basic externality graph, the triangle representing DWL always points to the socially optimal point.
• Label ACEs - axes, curves, and equilibrium points.