Microeconomics Essay by vbp18187


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									Advanced Placement Microeconomics
Top Ten Essay Topics

1.       (A) Perfect Competition (industry or market v. firm)
         What happens when there is an increase or decrease in demand?
         What happens when there is an increase or decrease in costs of production?
              Fixed costs – ATC shifts up or down
              Variable costs – ATC and MC shift up and to the left or down and to the right
         Is he efficient? P=MC (allocative) P=Min. ATC (productive)
     (B) Monopolistic Competition
         How does it compare to a perfect competition and a monopoly?
     (C) Oligopoly
         Kinked Demand – What causes it?
         Proportional Demand
         Price Leadership
     (D) Monopoly
         How does it determine price and output?
         What is a natural monopoly?
         How is it regulated?
         Price Discrimination?

2.        Elasticity and total revenue.
     Elastic – indirect relationship between price and total revenue
     Inelastic – direct relationship between price and total revenue

3.        Price floors and ceilings.
     Floors – min. wage or farm price supports
     Ceilings – rent control (black markets)

4.      Resource Markets – Labor
     How does a firm decide how much labor to buy and at what price?
     What is the firm’s demand curve for labor and how do you calculate it?

5.      Externalities
     What is the optimal level of production or consumption?
     What is the problem with positive or negative externalities and how do you correct the problem?
        Taxes and subsidies

6.       Costs of Production
     Short run v. long run
         Law of Diminishing returns v. Diseconomies of Scale
     Relationship between AP, MP, TP, MC, AVC

7.      Elasticity and the tax burden.
     Who pays the tax?
     What is the deadweight loss area?

8.       Accounting v. Economic profits.

9.       Supply and Demand Analysis
     Floors and Ceilings
     Determinants of Supply and Demand
     What happens when there is a shift in both?
     What is the difference between a change in demand and a change in quantity demanded?

10. Absolute v. Comparative Advantage

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