AP Microeconomics — Practice Questions flashcards

6 of 60 questions free to study here · 6 topics · the whole deck is built into Willys

Multiple-choice practice questions, one best answer each, on trade, supply and demand, elasticity, surplus, taxes, costs, market structures, game theory, factor markets and externalities.

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Practice deck · part of AP Microeconomics · written against: College Board AP Microeconomics Course and Exam Description (six units). Updated 2026-10-10.

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On Saturday Maya can work a shift that pays 80 dollars, tutor a student for 60 dollars, or go to a free outdoor concert. She can do only one, and she chooses the concert. What is the opportunity cost of her choice?

A) The 60 dollars from the tutoring job
B) Nothing, because the concert is free
C) The 140 dollars from both forgone jobs
D) The 80 dollars from the work shift

D) The 80 dollars from the work shift

Opportunity cost is the value of the single next-best alternative given up, here the 80-dollar shift. Adding both jobs is wrong because she could have done only one of them anyway.
Basic Economic Concepts › Scarcity and Economic Systems
Which event would shift the demand curve for hot dogs to the right?

A) A fall in the price of hot dog buns
B) A fall in the price of hot dogs
C) A fall in the cost of producing hot dogs
D) A rise in incomes, if hot dogs are an inferior good

A) A fall in the price of hot dog buns

Buns are a complement, so cheaper buns raise the demand for hot dogs. A lower hot dog price is a movement along the demand curve, lower production cost shifts supply, and higher income lowers demand for an inferior good.
Supply and Demand › Demand and Supply
With a fixed number of machines, a factory's total product for 0, 1, 2, 3, 4 and 5 workers is 0, 8, 20, 30, 36 and 38 units. With which worker do diminishing marginal returns begin?

A) The third worker
B) The second worker
C) The fourth worker
D) The fifth worker

A) The third worker

Marginal products are 8, 12, 10, 6 and 2. MP rises through the second worker and first falls with the third, which is where diminishing marginal returns begin. Total product still rises after that; it just rises by less each time.
Production Cost and Perfect Competition › Production and Costs
A monopolist faces the demand curve $P = 60 - Q$ and has a constant marginal and average total cost of 20 dollars. What are its profit-maximizing price and its profit?

A) A price of 30 dollars and a profit of 300 dollars
B) A price of 20 dollars and a profit of 0 dollars
C) A price of 40 dollars and a profit of 400 dollars
D) A price of 40 dollars and a profit of 800 dollars

C) A price of 40 dollars and a profit of 400 dollars

MR = 60 − 2Q; setting MR = MC = 20 gives Q = 20, and demand gives P = 40 dollars. Profit = (40 − 20) × 20 = 400 dollars. A price of 30 dollars is where total revenue peaks (MR = 0), and 800 dollars is total revenue.
Imperfect Competition › Monopoly
A firm sells its output in a perfectly competitive market for 5 dollars per unit. Total product with 1 to 5 workers is 10, 18, 24, 28 and 30 units. If the market wage is 25 dollars, how many workers should it hire?

A) 3 workers
B) 5 workers
C) 4 workers
D) 2 workers

A) 3 workers

Marginal products are 10, 8, 6, 4 and 2, so MRP = MP × P is 50, 40, 30, 20 and 10 dollars. The third worker's MRP of 30 exceeds the 25-dollar wage, but the fourth adds only 20, so the firm hires 3 workers.
Factor Markets
In a market, demand (marginal private and social benefit) is $P = 100 - Q$ and marginal private cost is $P = 20 + Q$ ⁠. Each unit also causes 20 dollars of damage to third parties. What are the socially optimal quantity and the per-unit tax that achieves it?

A) 30 units, with a per-unit tax of 10 dollars
B) 35 units, with a per-unit tax of 10 dollars
C) 30 units, with a per-unit tax of 20 dollars
D) 40 units, with a per-unit tax of 20 dollars

C) 30 units, with a per-unit tax of 20 dollars

Marginal social cost is 40 + Q, so MSB = MSC gives 100 − Q = 40 + Q and Q = 30. A Pigouvian tax equal to the 20-dollar marginal external cost moves the market there. 40 units is the unregulated market quantity.
Market Failure and the Role of Government › Externalities

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About these cards

Review status: Second-reader reviewed, with corrections applied.

Checked against:

Topic outline follows the College Board AP Microeconomics Course and Exam Description (effective Fall 2026), Units 1–6 (used as an outline only; no text copied).
OpenStax Principles of Economics 3e, consulted as a reference; no text copied.
Checked against Mankiw, Principles of Microeconomics (reference only; no text copied). Graphs are described in words, and every numerical answer was recomputed by script.

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