Official 2011 AP Economics Thread

<p>LET'S DO THIS.</p>

<p>I'm taking Macro.</p>

<p>I'm taking macro/micro.</p>

<p>I'm not as good at Factor Markets and Externalities (micro)
And on Macro international trade of course but it's okay I understand the gist.
I hear this test is ridiculous in the easiness of it.</p>

<p>I'm taking both</p>

<p>I'm taking macro and micro. I'm thinking about not taking micro though. :/</p>

<p>Could someone explain these answers to this FRQ? I read the guidelines and they don't really explain.
<a href=""&gt;;/a>
1. (c), (d)
2. (d)
3. (a)</p>

<p>Yeah so basically I suck at micro.</p>

<p>Taking macro and micro, worried more about macro than micro.</p>

1. c) It's positive. On the graph it may seem like it's zero because that's where ATC crosses P, but that only shows economic profit. Accounting profit does not regard the opportunity costs, so the ATC would theoretically be lower. That's sorta an iffy explanation but hopefully you understand.
d) Breakeven is where costs equals price which is at Q3. For part 2 you know it's not perfectly inelastic/elastic for sure because it's not a vertical or horizontal line. Where MR = 0, that's when the demand is unit elastic. When MR > 0 the demand is elastic, and where MR < 0 demand is inelastic. So the answer has to be relatively inelastic.
2. d) Any firm will higher a work if MRP is greater than or equal to MRC. Since the fifth worker can only make $300 worth of stuff (his MRP), the firm is only going to pay him $300 for him to work.
3. a) For a elastic good, as price goes down TR goes up, which is the case for the buyers of good X so the good is relatively elastic. If a good is inelastic that means that at any price the same quantity will be sold. Which is the case for the sellers of good X. I'm not sure about the per-unit tax. But because the supply is inelastic and the buyers can change their mind about buying it at different quantities, I would think that the tax burden is on the suppliers. </p>

<p>Can you explain 3 b?</p>

<p>I just discovered the awesomeness that is Reffonomics. It will save your life.</p>

<p>Thank you for the explanations appleandrice!</p>

<p>3b. All you need to know about the -2 is that it's negative. That means that as income increases, demand decreases, so it's an inferior good. That means that the demand curve shifts left when income increases.</p>

<p>Macro is all about graphs. I'm a lot better at macro than I am at micro, so maybe I can help you.</p>

<p>Anyone know how accurate the 5 steps practice tests are?</p>

<p>@CORVIDS the only thing I'm not confident about is foreign exchange markets. My teacher uses Reffonomics in his class all the time, it's pretty useful but the thing on foreign exchange isn't that good.
Does anyone have any practice tests to exchange? I have 95 and the audit ones for both macro and micro.</p>

<p>Did anyone else take the Barron's practice test and find it to be a joke? I finished with a perfect score in half the time. Its so unusual, usually Barron's is harder than the real thing.</p>

<p>I also really need released exams. Anything would be appreciated.</p>

<p>I tried to explain foreign exchange markets. Sorry if anything isn't clear.</p>

<p>The graph of the X foreign exchange market is X (on the x-axis) vs. Y price of one X (on the y-axis), where X is the currency we're focusing on an Y is the currency we're comparing X to. The two curves are demand for X and supply of X. When the Y price of one X goes up, X is appreciating/strengthening (because that means that you need more Y to exchange for just one X). When the Y price of one X goes down, X is depreciating/weakening.</p>

<p>Things that change demand for X in the X market (let's say X is America and Y is Europe, so we're talking about changes in demand for US$ in the US$ market):</p>

<li><p>Consumer tastes: when Europeans like the things Americans make, demand for US$ increases</p></li>
<li><p>Relative incomes: when the America has a weak economy, demand for US$ increases because Europeans can buy American things for cheaper prices than things in Europe</p></li>
<li><p>Relative inflation: similar to relative incomes: when America has LOW inflation, demand for US$ increases because Europeans can buy American things for cheaper prices</p></li>
<li><p>Speculation: the foreign exchange market is like a stock market: if people think American dollars will be stronger in the future, they will demand more US$ now</p></li>
<li><p>Monetary policy: when the Fed increases the money supply, interest rates go down, so demand for US$ goes down too because foreigners want to invest less;
when the Fed decreases the money supply, interest rates go up, so the demand for US$ goes up too because foreigners want to invest more</p></li>

<p>Basically, demand for US$ from Europeans goes up when the US economy is weaker than Europe's and Europeans like American things, unless the Fed increases the money supply, which cancels out everything else.</p>

<p>I've been talking about the US$ market, but this also affects the Euro market. Namely, it changes the supply of Euros (NOTE: this is ONLY the supply of Euros in the foreign exchange market, not the supply of all Euros). If Europeans demand more US$, the supply of Euros in the Euro market increases (because more Euros are being exchanged in the foreign exchange market).</p>

<p>@Staller: Here's the 95 one:
<a href=""&gt;;/a&gt;&lt;/p>

<p>Btw congrats on Penn. Penn is my dream school. (:</p>

<p>Thanks man, hope to see you there.</p>

<p>I have the 95s. I hope they arent a bit outdated by now though</p>

<p>whats the best prep book?</p>

<p>^ 5 steps to a 5</p>

<p>^ Yes, I agree. I'm usually not into 5 steps to a 5 AP prep books as my sole source of material because of their laid back/witty style, but for economics, it just seems to work. Great book. We did micro the first semester and I received a 5 on one of the released AP exams all thanks to 5 steps to a 5, so I'm just going to reread the book and put some extra focus on macro so I can hopefully pull off some nice scores.</p>

<p>I'm taking Macro, using PR. I kind of wish I would've gotten 5 steps to a 5, but oh well.</p>

<p>I have PR too. I think it's pretty good so far.</p>

<p>All right, I pretty much don't remember micro (sem. 1 class), and I'm having issues with the currency exchange/foreign crap with macro. I think I learned micro better though...</p>

<p>I'm predicting a 3 on macro and a 4 on micro. It'd be miraculous if I got a 4 on both, or a five on either. The writing portions pretty easy though eh? </p>

<p>What are you guys predicting?</p>

<p>Can anyone please give me a link or explain the game theory? I really can't get a hang of it fro some reason... D:</p>

<p>Can anyone also link me to a graph of a monopolistically competitive market? 5 steps doesn't have a very good one :S</p>

<p>How helpful is it to understand the terms in Macroeconomics for the AP Exam?</p>

<p>does anyone have any macro practice tests or released exams? i have the 1995, 2000, and 2005 exams for trade if anyone has any others</p>

<a href=""&gt;;/a>
Reffonomics helps a lot for all the topics, there's the link for game theory.
@Spideyswag, I guess it wouldn't hurt to know all your vocab, know the graphs for sure!</p>