Ap Micro Unit 2 Progress Check Mcq

AP Micro Unit 2 Progress Check MCQ: A Comprehensive Guide

The AP Microeconomics Unit 2 Progress Check covers a crucial section of the course focusing on supply and demand, market equilibrium, and government intervention. Mastering this unit is vital for success on the AP exam. This comprehensive guide will delve into key concepts, provide practice questions mirroring the Progress Check format, and offer strategies for maximizing your score.

Understanding the Core Concepts of Unit 2

Unit 2 builds upon the foundational principles of microeconomics introduced in Unit 1. It emphasizes the dynamic interplay between buyers and sellers, how prices are determined, and the consequences of government intervention in the market. Let's break down the critical concepts:

1. Supply and Demand: The Foundation of Market Economics

• Demand: Represents the consumer's desire and ability to purchase a good or service at various price points. Key factors influencing demand include price, consumer income, prices of related goods (substitutes and complements), consumer tastes and preferences, and consumer expectations. Understanding the law of demand (inverse relationship between price and quantity demanded) is crucial.

• Supply: Represents the producer's willingness and ability to offer a good or service at various price points. Key factors influencing supply include input prices (raw materials, labor), technology, government regulations, producer expectations, and the number of sellers. Understanding the law of supply (direct relationship between price and quantity supplied) is equally important.

• Demand and Supply Schedules and Curves: These graphical and tabular representations visualize the relationship between price and quantity demanded/supplied. Knowing how to interpret and analyze these is essential for understanding market equilibrium.

• Shifts vs. Movements Along the Curves: A crucial distinction. A movement along the curve occurs due to a change in the price of the good itself. A shift of the curve occurs due to a change in one of the other factors influencing demand or supply (e.g., consumer income, input prices).

2. Market Equilibrium: Where Supply Meets Demand

• Equilibrium Price and Quantity: The point where the supply and demand curves intersect. At this point, the quantity demanded equals the quantity supplied. This represents the market-clearing price – the price at which all buyers and sellers are satisfied.

• Surplus and Shortage: When the price is above the equilibrium price, a surplus (excess supply) occurs. When the price is below the equilibrium price, a shortage (excess demand) occurs. Understanding how these imbalances drive the market towards equilibrium is key.

• Analyzing Market Changes: Being able to predict the impact of shifts in supply or demand on equilibrium price and quantity is a crucial skill. This requires a clear understanding of the direction and magnitude of the shifts.

3. Government Intervention in Markets: Price Controls and Taxes

• Price Ceilings: Maximum legal prices set below the equilibrium price. They are intended to protect consumers but often lead to shortages and black markets.

• Price Floors: Minimum legal prices set above the equilibrium price. They are intended to protect producers but often lead to surpluses.

• Taxes: Governments levy taxes on goods and services, impacting both buyers and sellers. Understanding the incidence of taxes (who bears the burden) is crucial. Taxes shift supply curves upward.

• Subsidies: Government payments to producers, effectively lowering the cost of production and shifting the supply curve downward.

Practice MCQ Questions: Mimicking the AP Micro Unit 2 Progress Check

Now, let's put your knowledge to the test with some practice multiple-choice questions designed to reflect the style and difficulty of the actual Progress Check:

1. If the price of a complement to good X decreases, what will happen in the market for good X?

(a) The demand for good X will decrease. (b) The supply of good X will increase. (c) The demand for good X will increase. (d) The supply of good X will decrease.

2. A surplus in the market for oranges will cause:

(a) An increase in the price of oranges. (b) A decrease in the price of oranges. (c) No change in the price of oranges. (d) An increase in the demand for oranges.

3. A government-imposed price ceiling set below the equilibrium price will lead to:

(a) A surplus. (b) A shortage. (c) No change in quantity traded. (d) An increase in the equilibrium price.

4. If the price of a substitute for good Y increases, what will happen to the demand for good Y?

(a) The demand for good Y will decrease. (b) The demand for good Y will increase. (c) The supply of good Y will increase. (d) The supply of good Y will decrease.

5. Which of the following would NOT cause a shift in the supply curve for apples?

(a) A change in the price of fertilizer. (b) A change in the price of apples. (c) A new technology for harvesting apples. (d) A change in the number of apple farmers.

6. A tax levied on producers of a good will:

(a) Increase the supply of the good. (b) Decrease the supply of the good. (c) Increase the demand for the good. (d) Decrease the demand for the good.

7. If consumer income increases and the good in question is a normal good, what will happen in the market?

(a) Demand will decrease. (b) Demand will increase. (c) Supply will decrease. (d) Supply will increase.

8. A price floor set above the equilibrium price will result in:

(a) A shortage. (b) A surplus. (c) A decrease in the equilibrium price. (d) No change in the market.

9. Which of the following is NOT a determinant of demand?

(a) Consumer tastes and preferences. (b) The price of the good. (c) The cost of producing the good. (d) Consumer income.

10. If a technological advancement reduces the cost of production, what will happen to the supply curve?

(a) It will shift to the left. (b) It will shift to the right. (c) It will remain unchanged. (d) It will become steeper.

Answers and Explanations

1. (c) A decrease in the price of a complement increases the demand for the good it complements.

2. (b) A surplus pushes prices down until the market reaches equilibrium.

3. (b) A price ceiling below equilibrium creates a shortage as quantity demanded exceeds quantity supplied.

4. (b) An increase in the price of a substitute increases the demand for the other good.

5. (b) A change in the price of apples is a movement along the supply curve, not a shift.

6. (b) A tax increases the cost of production, shifting the supply curve leftward.

7. (b) For normal goods, an increase in income leads to increased demand.

8. (b) A price floor above equilibrium creates a surplus as quantity supplied exceeds quantity demanded.

9. (c) The cost of producing a good is a determinant of supply, not demand.

10. (b) A technological advancement lowers costs, increasing the quantity supplied at each price level, shifting the supply curve rightward.

Strategies for Success on the AP Micro Unit 2 Progress Check

• Thorough Understanding of Concepts: Don't just memorize definitions; truly understand the underlying principles of supply and demand, equilibrium, and government intervention.

• Practice, Practice, Practice: Work through numerous practice problems. The more you practice, the more comfortable you'll become with analyzing market scenarios.

• Graphical Analysis: Master the ability to interpret and draw supply and demand graphs. This is crucial for understanding market dynamics.

• Real-World Applications: Relate the concepts to real-world examples. This will help you understand the practical implications of the theories.

• Review Past Exams and Practice Tests: Familiarize yourself with the style and format of the AP Microeconomics exam. This will help you manage your time effectively and approach questions strategically.

• Seek Clarification: Don't hesitate to ask your teacher or a tutor for help if you're struggling with any concepts.

By diligently following these strategies and mastering the concepts outlined in this guide, you'll significantly improve your chances of achieving a high score on the AP Microeconomics Unit 2 Progress Check and ultimately, the AP exam itself. Remember that consistent effort and a deep understanding of the material are key to success.