AP Microeconomics 2024 Free Response Review

What was the instructor's prediction for the 2024 AP Microeconomics free response topics?

• Monopoly and price discrimination

• Perfect competition and elasticity

• Oligopoly and game theory

• Supply and demand shifts

In a perfectly competitive market, what happens if a firm raises its price by $1?

• Revenue increases

• Revenue remains the same

• Revenue decreases to zero

• Revenue doubles

What is the effect of an increase in demand for soybeans in a perfectly competitive market?

• Price and quantity decrease

• Price increases, quantity decreases

• Price and quantity increase

• Price decreases, quantity increases

What is the socially optimal solution for a market with a positive externality?

• Tax on consumers

• Per-unit subsidy

• Price ceiling

• Price floor

How is deadweight loss calculated in a market with a positive externality?

• Base times height

• One half base times height

• Base plus height

• Base minus height

In a payoff matrix, what does it mean if a player has a dominant strategy?

• The player chooses randomly

• The player never chooses the same strategy

• The player always chooses the same strategy

• The player has no strategy

What is a Nash equilibrium in the context of game theory?

• A situation where players have no incentive to change their strategy

• A situation where players have no strategy

• A situation where players always change their strategy

• A situation where one player dominates the other

If two companies become a monopoly, what is their combined profit?

• $80 million

• $70 million

• $60 million

• $50 million

What happens to Field Cruiser's strategy if there is a $10 million reduction in profit for focusing on power?

• Field Cruiser switches to reliability

• Field Cruiser has no strategy

• Field Cruiser maintains power

• Field Cruiser switches to power

What is the new profit for Nice Ride if Field Cruiser focuses on reliability?

• $50 million

• $30 million

• $20 million

• $40 million