UNIT 2: THE NATURE and FUNCTIONS of PRODUCT MARKETS Unit 2 makes up between 55 - 70% of the multiple choice section of the AP exam and is divided into smaller more manageable parts. Part 1, Supply and Demand will take approximately 26 days and covers Chapters 4 - 9 in your text. There will be text assignments from each chapter, APIP activities and practices, 4 quizzes, 2 FRQs, and a mini-unit test. Chapters 21 - 22 cover the theory of consumer choice and will take about 7 days. You'll complete 1 assignment and take a "blue book" quiz over the chapters. The last segment of Part 1, production and costs, is in Chapter 13 and will take less than a week. There will be 1 assignment from the text. Part 2, Firm behavior and Market structure, will take 21 days and covers Chapters 14 - 17. There will be text assignments from each chapter, APIP activities and practices, chapter quizzes, 2 FRQs, and a unit test. Upon completion of this unit you will be able to: 1. Identify and describe the determinants of supply and demand. 2. Explain the laws of supply and demand. 3. Explain why market equilibrium is the market clearing price and quantity. 4. Discuss how price acts as a signal to producers and consumers. 5. Explain the nature of elasticity on supply and demand. 6. Identify consumer and producer surplus in the market. 7. Explain how total surplus relates to market efficiency. 8. Describe how taxes create inefficiency in the market. 9. Discuss tax incidence and deadweight loss. 10. Differentiate between total utility and marginal utility. 11. Explain the difference between income and substitution effects. 12. Analyze short -run and long-run costs. 13. Describe short-run and long-run production functions. 14. Define economies of scale. 15. Explain the MR = MC rule of profit maximization. 16. Differentiate between accounting and economic profits. 17. Differentiate between market structures: Perfect competition, Monopoly, Oligopoly, and Monopolistic Competition. 18. Identify profit maximization points of the various market structures. Part 1 (Supply and Demand) Assignments CHAPTER 4: Problems and Applications Pages 87-88: 1, 5, 7, and 11-15. CHAPTER 5: Problems and Applications Pages 110-111: 1-3, 5, 6, 9-11, and 13. CHAPTER 6: Problems and Applications Pages 132-133: 2-4, 8, 9, 13. CHAPTER 7: Problems and Applications Pages 155-157: 1-3, 8, and 11. CHAPTER 8: Problems and Applications Pages 173-175: 1-7, and 12. CHAPTER 9: Problems and Applications Pages 196-199: 1, 5, 6-8, 10, and 13. Vocabulary is extremely important with this unit. While I am not requiring you to keep vocabulary cards, it would be prudent for you to keep a vocabulary journal of terms used in this unit. You will take 2-3 quizzes where knowledge of terminology is essential. There will be practices and in-class assignments that will accompany this unit.
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