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The 2012 AP Microeconomics Exams

The 2012 AP Microeconomics Exams. Dave Anderson Centre College Chief Reader. Agenda. Exam Developers Scores Areas of Strength Areas of Weakness Discussion. Microeconomics Committee Chair Pamela M. Schmitt, United States Naval Academy Michael A. Brody , Menlo School

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The 2012 AP Microeconomics Exams

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  1. The 2012AP Microeconomics Exams Dave AndersonCentre College Chief Reader

  2. Agenda • Exam Developers • Scores • Areas of Strength • Areas of Weakness • Discussion

  3. MicroeconomicsCommittee ChairPamela M. Schmitt, United States Naval AcademyMichael A. Brody, Menlo School Committee MembersLuis F. Fernandez, Oberlin CollegeMargaret Ray, Mary Washington CollegeDee Mecham, The Bishop’s SchoolSandra K. Wright, Adlai E. Stevenson High SchoolCollege Board AdvisorMary Kohelis, Brooke High SchoolChief ReaderDavid Anderson, Centre CollegeETS Assessment SpecialistsFekru DebebeHwanwei Zhao

  4. Exams • Microeconomics • 59,000 Operational Exams • 3,300 Alternate Exams

  5. Mean / Standard Deviation / Max • Monopoly 4.66 2.83 10 • Consumer Choice Theory 2.46 1.64 6 • Supply and Demand 1.59 1.29 5

  6. Scores 2012 5 14.8% 4 28.3% 3 21.8% • 2 16.3% • 1 18.8%

  7. Scores 2012 5 14.8% 4 28.3% 3 21.8% • 2 16.3% • 1 18.8% • 2011 • 14.6% • 25.9% • 21.6% • 16.0% • 21.9%

  8. Students Did Great On • Monopoly Graph • Marginal Revenue and Demand Curves • Profit Max Quantity where MR = MC • Price on Demand Curve above Q* • Finding Total Utility by Summing MU • Identifying Domestic Production Level in Situation with Imports and a Tariff

  9. Most Common ErrorsAP Microeconomics 2012

  10. 9. Optimal Consumption Rule 7. Effect of Subsidy on Quantity Produced 6. Effect of Lump-Sum Subsidy on Deadweight Loss 5. Tariff Revenue 4. Value of Consumer Surplus 3. Cross-price Elasticity 2. Effect of Price Increase on Total Revenue Surplus-maximizing Tariff Special Mention: Labels! Overview of Trouble Spots

  11. 9. Micro 2 (a)(ii) Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis.

  12. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis.

  13. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis.

  14. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis. $1

  15. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis. $2

  16. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis. $3

  17. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis. $4

  18. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis. $6

  19. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis. $8

  20. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis. $10

  21. Question: Theresa’s weekly income is $11, the price of a bagel is $2, and the price of a toy car is $1. What quantity of bagels and toy cars will maximize Theresa’s utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis. $11

  22. Or find whereMUBagels/$ = MUCars/$and all money is spent

  23. MUBagels/$ = MUCars/$and all money is spent32% answered correctly

  24. 8. Micro 2 (b) Question: Assume that the price of wheat, an input for the production of bagels, increases. Will Theresa’s demand for bagels increase, decrease, or not change? Explain.

  25. 8. Micro 2 (b) Answer: Theresa’s demand for bagels will not change because the increase in the price of wheat will affect the supply of bagels, not the demand. (25% answered correctly)

  26. 7. Micro 1 (c)(i) Question: Assume a per-unit subsidy is provided to Steverail. Will Steverail’s quantity increase, decrease, or not change? Explain.

  27. 7. Micro 1 (c)(i) Answer: Steverail’s quantity will increase because the MC curve will shift downward and intersect MR at a larger quantity. (25% answered correctly)

  28. 6. Micro 1 (d) Question: Assume that a lump-sum subsidy is provided to Steverail. In the short run, will deadweight loss increase, decrease, or not change? Explain.

  29. 6. Micro 1 (d) Answer: Deadweight loss will not change becausethe profit-maximizing quantity does not change. (20 percent answered correctly)

  30. 5. Micro 3 (b)(iii) Question: Suppose that Loriland imposes a per-unit tariff on sugar imports and the new domestic price including the tariff is $4. Calculate the total tariff revenue collected by the government. You must show your work.

  31. Question: Suppose that Loriland imposes a per-unit tariff on sugar imports and the new domestic price including the tariff is $4. Calculate the total tariff revenue collected by the government. You must show your work.

  32. Domestic Price 2 4 Question: Suppose that Loriland imposes a per-unit tariff on sugar imports and the new domestic price including the tariff is $4. Calculate the total tariff revenue collected by the government. You must show your work.

  33. Domestic Price 2 4 2 x 4 = 8 20% answered correctly

  34. 4. Micro 3 (b)(ii) Question: Suppose that Loriland imposes a per-unit tariff on sugar imports and the new domestic price including the tariff is $4. Calculate the domestic consumer surplus for Loriland. You must show your work.

  35. 5 Domestic Price 10 Question: Suppose that Loriland imposes a per-unit tariff on sugar imports and the new domestic price including the tariff is $4. Calculate the domestic consumer surplus for Loriland. You must show your work.

  36. 5 Domestic Price 10 ½ base x height = ½ x 5 x 10 = 25 • 18% answered correctly

  37. 3. Micro 2 (d) Question: Suppose that when the price of toy cars increases by 10 percent, Theresa buys 5 percent fewer toy cars and 4 percent less of a different toy, blocks. Calculate the cross-price elasticity of toy cars and blocks and indicate if it is positive or negative.

  38. 3. Micro 2 (d) Cross-price elasticity = %∆QBlocks/ %∆Ptoys = -0.04 / 0.10 = -0.4

  39. 3. Micro 2 (d) Answer: -0.4 (15% answered correctly)

  40. 2. Micro 1 (b) Question: If Steverail raised its price above Pm identified in part (a)(i), would total revenue increase, decrease, or not change? Explain.

  41. Question: If Steverail raised its price above Pm identified in part (a)(i), would total revenue increase, decrease, or not change? Explain.

  42. 2. Micro 1 (b) Answer: Total revenue would decrease because the demand is price elastic in that range of the demand curve.(Or because MR > 0). (12% answered correctly)

  43. Price Elastic Range Inelastic range Demand 0 Quantity Marginal Revenue Price Total Revenue 0 Quantity

  44. 1. Micro 3 (c) Question: Given the world price of $2, what per-unit tariff maximizes the sum of Loriland’s domestic consumer surplus and producer surplus?

  45. Domestic Price A common wrong answer: $3

  46. $0 Tariff

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