5 Steps to a 5: AP Microeconomics

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 CONTENTS

Preface
Acknowledgments
About the Author
Introduction: The Five-Step Program

STEP 1 Set Up Your Study Program

1 What You Need to Know About the AP
Microeconomics Exam
Background Information
Some Frequently Asked Questions About the AP
Economics Exams
2 How to Plan Your Time
Three Approaches to Preparing for AP Exams
Calendar for Each Plan

STEP 2 Determine Your Test Readiness

3 Take the Diagnostic Exam
Diagnostic Exam: AP Microeconomics

STEP 3 Develop Strategies for Success

4 How to Approach Each Question Type
Section I: Multiple-Choice Questions
Section II: Free-Response Questions

STEP 4 Review the Knowledge You Need to Score High

5 Fundamentals of Economic Analysis
 5.1 Scarce Resources
5.2 Production Possibilities
5.3 Functions of Economic Systems
6 Demand, Supply, Market Equilibrium, and
Welfare Analysis
6.1 Demand
6.2 Supply
6.3 Market Equilibrium
6.4 Welfare Analysis
7 Elasticity, Microeconomic Policy, and Consumer
Theory
7.1 Elasticity
7.2 Microeconomic Policy and Applications of Elasticity
7.3 Trade Barriers
7.4 Consumer Choice
8 The Firm, Profit, and the Costs of Production
8.1 Firms, Opportunity Costs, and Profits
8.2 Production and Cost
9 Market Structures, Perfect Competition,
Monopoly, and Things Between
9.1 Perfect Competition
9.2 Monopoly
9.3 Monopolistic Competition
9.4 Oligopoly
10 Factor Markets
10.1 Factor Demand
10.2 Least-Cost Hiring of Multiple Inputs
10.3 Factor Supply and Market Equilibrium
10.4 Imperfect Competition in Product and Factor
Markets
 11 Public Goods, Externalities, and the Role of
Government
11.1 Public Goods and Spillover Benefits
11.2 Pollution and Spillover Costs
11.3 Income Distribution and Tax Structures

STEP 5 Build Your Test-Taking Confidence

AP Microeconomics Practice Exam 1
AP Microeconomics Practice Exam 2

ELITE
STUDENT
EDITION 5 Minutes to a 5
90 AP Microeconomics Activities and Questions in 5
Minutes a Day
90 AP Macroeconomics Activities and Questions in 5
Minutes a Day
Appendixes
Further Reading
Websites
Glossary
Important Formulas and Conditions
 PREFACE

So, you’ve decided to bite the bullet and invest in a book designed to
help you earn a 5 on your AP Microeconomics exam.
Congratulations! You have taken the first of many small steps toward
this goal. An important question remains: Why this book?
Priority number one, both for your AP course and for this book, is
to prepare you to do well enough on the AP Microeconomics exam to
earn college credit. I firmly believe that this book has a comparative
advantage over your other options. First, I have written this text
with a certain conversational approach, rather than a flurry of
formulas and diagrams that you must remember. Sure, some
memorization is required for any standardized test, but a memorizer
of formulas is in deep trouble when asked to analyze the relative
success of several possible economic policies or to draw fine
distinctions between competing economic theories. Using this book
to supplement and reinforce your understanding of the theories and
relationships in economics allows you to apply your analytical skills
to the exam, and this gives you a significant advantage over the
formula-memorizing exam taker. If you spend less time memorizing
formulas and take the extra time to understand the basics, you will
get along just fine with this book, and you will do extremely well on
the AP Economics exams.
Second, as a college professor who has taught economics to
thousands of students, I have a strong understanding of where the
learning happens and where the mistakes are made.
Third, as a reader and writer of AP exams, I can tell you where
points are lost and where a 5 is made on the free-response
questions. Most important, I am a realist. You want to know what it
takes to earn a 5 and not necessarily the finer points of the Federal
Reserve System, the Sherman Antitrust Act, or the NAFTA.
 Take the time to read the first four chapters of this book, which
are designed to help you understand the challenge that lies ahead
and to provide you with tips for success on the exam.
Take the diagnostic exam to see where you stand before
beginning your review. The bulk of this book is a comprehensive
review of microeconomics with practice questions at the end of each
chapter. These questions are designed to quickly test your
understanding of the material presented in each chapter, not
necessarily to mirror the AP exam. For exam questions that are more
typical of what you will experience in May, I have provided you with
two practice exams in microeconomics. These are practice exams,
complete with essay questions, sample responses, and scoring
guidelines.
There have been several important updates since the first
edition. The second edition included expanded coverage of game
theory, reflecting the growing use of game theory in the AP
Microeconomics curriculum. In that edition, I included a free-
response question involving game theory because the people who
develop the AP exam had been urging high school AP teachers to
devote more time to game theory. Such urgings are usually a strong
hint of a future free-response question, and indeed in 2007, the
Microeconomics exam included, for the first time, a free-response
game-theory question.
In the 2018 edition of this book, I included details of the impact
that trade barriers, such as tariffs and quotas, have on competitive
markets. While the topic of trade barriers has been present in the AP
Microeconomics course outline for several years, it was not tested
extensively in the free-response section until 2012. That edition also
added coverage of the market for capital in the factor markets
chapter to reflect a growing emphasis in both teaching and testing
more than simply labor markets. I also brought some of the
coverage of externalities more in line with recent AP exams and the
rubrics that were used to grade them.
To reflect more recent points of emphasis in the AP exam, the
2019 edition expanded the explanation of how certain costs can be
identified and computed in a graph. I also provided additional
graphing tips and modified some questions in the practice exams.
This new edition reflects some changes that the College Board
has made to the AP Microeconomics curriculum. For the most part,
the content is quite similar to what has been taught, and tested, for
the last decade or more. While the changes are not fundamentally
changing the Microeconomics course, it is important that this book
keeps pace with those changes. More specific details about the
changes to the Microeconomics course are given in Chapter 1. As
with every edition, I adjust free-response questions and rubrics to
better reflect how those questions are being scored at the annual
Reading.
I do not see any reason to continue talking about the book when
we could just dive in. I hope that you enjoy this book and that you
find it a useful resource. Good luck!
 ACKNOWLEDGMENTS

This book is dedicated to my wife, Dr. Melanie Fox, and our three
sons, Eli, Max, and Theo. My utility for you is increasing at an
increasing rate. Thank you.
 ABOUT THE AUTHOR

Eric R. Dodge was born in Portland, Oregon, and attended high

school in Tigard, Oregon. He received a bachelor’s degree in
Business Administration from the University of Puget Sound in
Tacoma, Washington, before attending the University of Oregon for
his master’s and doctoral degrees in Economics. While at the
University of Oregon, he received two graduate student awards for
teaching and became a die-hard fan of the Ducks. Since 1995, he
has been teaching economics at Hanover College in Hanover,
Indiana, the oldest private college in the state. The author teaches
principles of microeconomics and macroeconomics, intermediate
microeconomic theory, labor economics, environmental economics,
industrial organization, statistics, econometrics, and the economics
of dams.
Since 2000, Eric Dodge has served as a faculty consultant for the
AP economics program, and has been a reader and writer of free-
response questions, table leader, and question leader at the annual
AP Economics Reading. With coauthor Melanie Fox, he has also
written three recently published books: Economics Demystified, 500
Microeconomics Questions: Ace Your College Exams, and 500
Macroeconomics Questions: Ace Your College Exams. He lives in
historic Madison, Indiana, with his wife, Melanie; sons Eli, Max, and
Theo; and a neurotic rain-fearing dog.
 INTRODUCTION: THE FIVE-
STEP PROGRAM

The Basics
Not too long ago, you agreed to enroll in AP Microeconomics. Maybe
you saw a flyer and the allure of economic knowledge was just too
much to resist, or maybe a respected teacher encouraged you to
challenge yourself and you took the bait. Either way, you find
yourself here, flipping through a book that promises to help you
culminate this life-changing experience with the highest of honors, a
5 in AP Microeconomics. Can it be done without this book? Sure,
there are many excellent teachers of AP Microeconomics out there
who teach, coax, and cajole their students into a 5 every year. But
for the majority of students in your shoes, the marginal benefits of
buying this book far outweigh the marginal costs.

Introducing the Five-Step Preparation

Program
This book is organized as a five-step program to prepare you for
success on the exam. These steps are designed to provide you with
the skills and strategies vital to the exam and the practice that can
lead you to that perfect 5. Each of the five steps will provide you
with the opportunity to get closer and closer to that prize trophy 5.
Following are the five steps:

Step 1: Set Up Your Study Program

In this step you’ll read a brief overview of the AP Microeconomics
exam, including an outline of topics and the approximate percentage
of the exam that will test knowledge of each topic. You will also
follow a process to help determine which of the following
preparation programs is right for you:
• Full school year: September through May
• One semester: January through May
• Six weeks: Basic training for the exam

Step 2: Determine Your Test Readiness

In this step you’ll take a diagnostic exam in microeconomics. This
pretest should give you an idea of how prepared you are to take the
real exam before beginning to study for it.
• Go through the diagnostic exam step by step and question by
question to build your confidence level.
• Review the correct answers and explanations so that you see
what you do and do not yet fully understand.

Step 3: Develop Strategies for Success

In this step you’ll learn strategies to help you do your best on the
exam. These strategies cover both the multiple-choice and free-
response sections of the exam. Some of these tips are based upon
my understanding of how the questions are designed, and others
have been gleaned from my years of experience reading (grading)
the AP Economics exams.
• Learn to read multiple-choice questions.
• Learn how to answer multiple-choice questions, including
whether or not to guess.
• Learn how to plan and write the free-response questions.

Step 4: Review the Knowledge You Need to

Score High
In this step you’ll review the material you need to know for the test.
This review section takes up the bulk of this book. It contains a
comprehensive review of microeconomics.
There is a lot of material here, enough to summarize a yearlong
experience in AP Microeconomics and highlight the, well, highlights.
Some AP courses will have covered more material than yours; some
will have covered less. The bottom line is that if you thoroughly
review this material, you will have studied all that is tested on the
exam, and you will significantly increase your chances of scoring
well. This edition gives new emphasis to some areas of
microeconomics to bring your review more in line with recent exams.
For example, recent editions included more discussion of tariffs and
game theory, whereas this edition includes more graphing tips in the
microeconomics review.

Step 5: Build Your Test-Taking Confidence

In this step you’ll complete your preparation by testing yourself on
practice exams. This section contains two complete exams in
microeconomics, solutions, and, sometimes more important, advice
on how to avoid the common mistakes. Once again, the 2020 edition
of this book has updated the free-response exams to more
accurately reflect the content tested on recent AP exams. Be aware
that these practice exams are not reproduced questions from actual
AP Microeconomics exams, but they mirror both the material tested
by AP and the way in which it is tested.
Lastly, at the back of this book you’ll find additional resources to
aid your preparation. These include the following:
• A brief bibliography
• A list of websites related to AP Microeconomics
• A glossary of terms related to the AP Microeconomics exam
• A summary of formulas related to the AP Microeconomics exam

Introduction to the Graphics Used in this Book

To emphasize particular skills and strategies, several icons appear in
the margins, alerting you to pay particular attention to the
accompanying text. We use these three icons:

This icon indicates a very important concept or fact that you should
not pass over.

This icon calls your attention to a strategy that you might want to
try.

This icon alerts you to a tip that you might find useful.

Boldfaced words indicate terms that are included in the

glossary. Throughout the book you will also find marginal notes,
boxes, and starred areas. Pay close attention to these areas because
they can provide tips, hints, strategies, and further explanations to
help you reach your full potential.
 STEP 1

Set Up Your Study Program

CHAPTER 1 What You Need to Know About the AP

Microeconomics Exam
CHAPTER 2 How to Plan Your Time
 CHAPTER 1

What You Need to Know About

the AP Microeconomics Exam

IN THIS CHAPTER
Summary: Learn what topics are tested, how the test is scored,
and basic test-taking information.

Key Ideas
Most colleges will award credit for a score of 4 or 5; some will
award credit for a score of 3.
Multiple-choice questions account for two-thirds of your final
score.
Free-response questions account for one-third of your final score.
 Your composite score on the two test sections is converted to a
score on the 1-to-5 scale.

Background Information
The AP Economics exams that you are taking were first offered by
the College Board in 1989. Since then, the number of students
taking the tests has grown rapidly. In 1989, 3,198 students took the
Microeconomics exam, and by 2012 that number had increased to
62,351.

Some Frequently Asked Questions About the

AP Economics Exams

Why Take the AP Economics Exams?

Although there might be some altruistic motivators, let’s face it:
most of you take the AP Economics exams because you are seeking
college credit. The majority of colleges and universities will accept a
4 or 5 as acceptable credit for their Principles of Microeconomics or
Macroeconomics courses. A number of schools will even accept a 3
on an exam. This means you are one or two courses closer to
graduation before you even begin working on the “freshman 15.”
Even if you do not score high enough to earn college credit, the fact
that you elected to enroll in AP courses tells admission committees
that you are a high achiever and serious about your education. In
recent years close to two-thirds of students have scored a 3 or
higher on their AP Microeconomics exam.

What Is the Format of the Exams?

Table 1.1 Summarizes the format of the AP Macroeconomics

and Microeconomics exams
Who Writes the AP Economics Exams?
Development of each AP exam is a multiyear effort that involves
many education and testing professionals and students. At the heart
of the effort is the AP Economics Development Committee, a group
of college and high school economics teachers who are typically
asked to serve for three years. The committee and other college
professors create a large pool of multiple-choice questions. With the
help of the testing experts at Educational Testing Service (ETS),
these questions are then pretested with college students enrolled in
Principles of Microeconomics and Macroeconomics for accuracy,
appropriateness, clarity, and assurance that there is only one
possible answer. The results of this pretesting allow each question to
be categorized by degree of difficulty. Several more months of
development and refinement later, Section I of the exam is ready to
be administered.
The free-response essay questions that make up Section II go
through a similar process of creation, modification, pretesting, and
final refinement so that the questions cover the necessary areas of
material and are at an appropriate level of difficulty and clarity. The
committee also makes a great effort to construct a free-response
exam that allows for clear and equitable grading by the AP readers.
At the conclusion of each AP reading and scoring of exams, the
exam itself and the results are thoroughly evaluated by the
committee and by ETS. In this way, the College Board can use the
results to make suggestions for course development in high schools
and to plan future exams.

What Topics Appear on the Exams?

The College Board, after consulting with teachers of economics,
develops a curriculum that covers material that college professors
expect to cover in their first-year classes. This curriculum has just
undergone a revision and the new outline for the Microeconomics
course is provided below. Based upon this outline of topics, the
multiple-choice exams are written such that those topics are covered
in proportion to their importance to the expected economics
understanding of the student. If you find this confusing, think of it
this way: Suppose that faculty consultants agree that market failure
and the role of government topics are important to the
microeconomics curriculum, maybe to the tune of 8 to 13 percent.
So if about 10 percent of the curriculum in your AP Microeconomics
course is devoted to these topics, you can expect roughly 10 percent
of the multiple-choice exam to address these topics. This curriculum
has just undergone a revision and the outline is provided below.
Remember, this is just a guide and each year the exam differs
slightly in the percentages.

Microeconomics
Unit 1: Basic Economic Concepts
This unit covers the foundations of microeconomic thinking,
decision-making under constraints, and rational choice.

Topics:
Scarcity
Resource allocation and economic systems
The Production Possibilities Curve
Comparative advantage and gains from trade
Cost-benefit analysis
Marginal analysis and consumer choice
Exam Coverage
12%–15%

Unit 2: Supply and Demand

This unit provides the basics for understanding how markets work
with an introduction to the supply and demand model.

Topics:
Demand
Supply
Elasticity
Market equilibrium, disequilibrium, and changes in equilibrium
The effects of government intervention in markets
International trade and public policy

Exam Coverage
20%–25%

Unit 3: Production, Cost, and the Perfect Competition Model

This unit describes the factors that drive the behavior of companies
and the model of perfect competition.

Topics:
The production function
Short- and long-run production costs
Types of profit
Profit maximization
Perfect competition

Exam Coverage
22%–25%

Unit 4: Imperfect Competition

This unit explores how imperfectly competitive markets work and
how game theory is used to predict behavior in oligopolies.
Topics:
Monopoly
Price discrimination
Monopolistic competition
Oligopoly and game theory

Exam Coverage
15%–22%

Unit 5: Factor Markets

This unit demonstrates how markets and marginal decision-making
are used to describe the workings of factor markets.

Topics:
Introduction to factor markets
Changes in factor demand and factor supply
Profit-maximizing behavior in perfectly competitive factor markets
Monopsonistic markets

Exam Coverage
10%–13%

Unit 6: Market Failure and the Role of Government

This unit looks at the conditions under which markets may fail and
the effects of government intervention in markets.

Topics:
Socially efficient and inefficient market outcomes
Externalities
Public and private goods
The effects of government intervention in different market
structures
Income and wealth inequality

Exam Coverage
8%–13%

My Teacher (and the Syllabus) Keeps Talking About “Big

Ideas” and “Skill Categories.” What Are These?
Most of the new curricular revision was a big-picture way of
describing, and teaching, the key concepts in the AP Microeconomics
course. While these are critical to your teacher’s preparation, and
fundamentally guide the way in which she structures the course, as
a student preparing for the exam you probably don’t need to have a
deep understanding of what is happening behind the scenes. In
other words, your course will be new and improved because of these
revisions, but your fantastic teacher is doing the heavy lifting on
making sure these are woven throughout the course.
But in case you’re still curious, there are four skill categories that
identify important skills that an AP Micro student should master
throughout the course. The table below provides a brief summary.

There also four Big Ideas that will appear throughout your course.
These are intended to reinforce common concepts that are key to a
deep understanding of microeconomics. The four Big Ideas are:
 1. Scarcity and Markets
2. Costs, Benefits, and Marginal Analysis
3. Production Choices and Behavior
4. Market Inefficiency and Public Policy

Much more detail on these Big Ideas and the Skill Categories can
be found in the “AP Microeconomics Course and Exam Description”
that is found at https://apcentral.collegeboard.org/pdf/ap-
microeconomics-course-and-exam-description.pdf?course=ap-
microeconomics.

Who Grades My AP Economics Exam?

From confidential sources, I can tell you that nearly 100,000 free-
response essay booklets are dropped from a three-story building,
and those that fall into a small cardboard box are given a 5, those
that fall into a slightly larger box are given a 4, and so on until those
that fall into a dumpster receive a 1. It’s really quite scientific!
Okay, that’s not really how it’s done. Instead, every June a group
of economics teachers gather for a week to assign grades to your
hard work. Each of these “Faculty Consultants,” or “Readers,” spends
a day or so getting trained on one question and one question only.
Because each reader becomes an expert on that question, and
because each exam book is anonymous, this process provides a very
consistent and unbiased scoring of that question. During a typical
day of grading, a random sample of each reader’s scores is selected
and cross-checked by other experienced “Table Leaders” to ensure
that the consistency is maintained throughout the day and the week.
Each reader’s scores on a given question are also statistically
analyzed to make sure that he or she is not giving scores that are
significantly higher or lower than the mean scores given by other
readers of that question. All measures are taken to maintain
consistency and fairness for your benefit.

Will My Exam Remain Anonymous?

Absolutely. Even if your high school teacher happens to randomly
read your booklet, there is virtually no way he or she will know it is
you. To the reader, each student is a number and to the computer,
each student is a bar code.

What About That Permission Box on the Back?

The College Board uses some exams to help train high school
teachers so that they can help the next generation of economics
students to avoid common mistakes. If you check this box, you
simply give permission to use your exam in this way. Even if you give
permission, your anonymity is still maintained.

How Is My Multiple-Choice Exam Scored?

The multiple-choice section of each Economics exam is 60 questions
and is worth two-thirds of your final score. Your answer sheet is run
through the computer, which adds up your correct responses. The
total scores on the multiple-choice sections are based on the number
of questions answered correctly. The “guessing penalty” has been
eliminated, and points are no longer deducted for incorrect answers.
As always, no points are awarded for unanswered questions. The
formula looks something like this:

Section I Raw Score = Nright

How Is My Free-Response Exam Scored?

Your performance on the free-response section is worth one-third of
your final score and consists of three questions. Another change to
the exam is that the first question will always be scored out of 10
points, and the second and third questions will each be scored out of
5 points. Because the first question is longer than the other two, and
therefore scored on a higher scale, it is given a different weight in
the raw score. If you use the following sample formula as a rough
guide, you’ll be able to gauge your approximate score on the
practice questions.
Section II Raw Score = (1.50 × Score 1) + (1.50 × Score 2) + (1.50
× Score 3)

So How Is My Final Grade Determined and What Does It

Mean?
With a total composite score of 90 points, and 60 being determined
on Section I, the remaining 30 must be divided among the three
essay questions in Section II. The total composite score is then a
weighted sum of the multiple-choice and the free-response sections.
In the end, when all of the numbers have been crunched, the Chief
Faculty Consultant converts the range of composite scores to the 5-
point scale of the AP grades.
Table 1.2 gives you a very rough example of a conversion, and as
you complete the practice exam, you may use this to give yourself a
hypothetical grade, keeping in mind that every year the conversion
changes slightly to adjust for the difficulty of the questions from year
to year. You should receive your grade in early July.

Table 1.2

Example:

In Section I, you receive 50 correct and 10 incorrect responses

on the microeconomics practice exam. In Section II, your scores
are 7/10, 5/5, and 5/5.
 Composite Score = 50 + 24 = 75.5, which would be assigned a
5.

How Do I Register and How Much Does It Cost?

If you are enrolled in AP Microeconomics in your high school, your
teacher is going to provide all of these details, but a quick summary
wouldn’t hurt. After all, you do not have to enroll in the AP course to
register for and complete the AP exam. When in doubt, the best
source of information is the College Board’s website:
www.collegeboard.com.
In 2019–2020 the fee for taking an exam is $94 for each exam.
Students who demonstrate financial need may receive a partial
refund to help offset the cost of testing. There are also several
optional fees that can be paid if you want your scores rushed to you
or if you wish to receive multiple grade reports.
The coordinator of the AP program at your school will inform you
where and when you will take the exam. If you live in a small
community, your exam might not be administered at your school, so
be sure to get this information.

What If My School Only Offered AP Macroeconomics and Not

AP Microeconomics, or Vice Versa?
Because of budget and personnel constraints, some high schools
cannot offer both Microeconomics and Macroeconomics. The
majority of these schools choose the macro side of the AP program,
but some choose the micro side. This puts students at a significant
disadvantage when they sit down for the Microeconomics exam
without having taken the course. Likewise, Macroeconomics test
takers have a rough time when they have not taken the
Macroeconomics course. If you are in this situation, and you put in
the necessary effort, I assure you that buying this book will give you
more than a fighting chance on either exam even if your school did
not offer that course.

What Should I Bring to the Exam?

On exam day, I suggest bringing the following items:

• Two sharpened number 2 pencils and an eraser that doesn’t leave

smudges.
• Two black or blue-colored pens for the free-response section.
Some students like to use two colors to make their graphs stand
out for the reader.
• A watch so that you can monitor your time. You never know
whether the exam room will have a clock on the wall. You cannot
have a watch that accesses the Internet, and make sure you turn
off any beep that goes off on the hour.
• Your school code.
• Your photo identification and social security number.
• Tissues.
• Your quiet confidence that you are prepared!

What Should I Not Bring to the Exam?

It’s probably a good idea to leave the following items at home:

• A calculator. It is not allowed for the Microeconomics or
Macroeconomics exam. However, this does not mean that math
will not be required. Questions involving simple computations
 have recently appeared on the exams, and later in the book I
point out a few places where knowing a little math can earn you
some points.
• A cell phone, smart watch, camera, tablet, laptop computer, or
walkie-talkie.
• Books, a dictionary, study notes, flash cards, highlighting pens,
correction fluid, a ruler, or any other office supplies.
• Portable music of any kind.
• Clothing with any economics on it.
• Panic or fear. It’s natural to be nervous, but you can comfort
yourself that you have used this book well and that there is no
room for fear on your exam.
 CHAPTER 2

How to Plan Your Time

IN THIS CHAPTER
Summary: The right preparation plan for you depends on your
study habits and the amount of time you have before the test.

Key Idea

Choose the study plan that’s right for you.

Three Approaches to Preparing for AP Exams

What kind of preparation program for the AP exam should you use?
Should you carefully follow every step, or are there perhaps some
steps you can bypass? That depends not only on how much time
you have, but also on what kind of student you are. No one knows
your study habits, likes, and dislikes better than you do. So you are
the only one who can decide which approach to use. This chapter
presents three possible study plans, labeled A, B, and C. Look at the
brief profiles that follow. These will help you determine which plan is
right for you.

You’re a full-school-year prep student if:

1. You are the kind of person who likes to plan for everything very
far in advance.
2. You buy your best friend a gift two months before his or her
birthday because you know exactly what to choose, where you
will buy it, and how much you will pay for it.
3. You like detailed planning and everything in its place.
4. You feel that you must be thoroughly prepared.
5. You hate surprises.

If you fit this profile, consider Plan A.

You’re a one-semester prep student if:

1. You buy your best friend a gift one week before his or her
birthday because it sort of snuck up on you, yet you have a clear
idea of exactly what you will be purchasing.
2. You are willing to plan ahead to feel comfortable in stressful
situations, but are okay with skipping some details.
3. You feel more comfortable when you know what to expect, but a
surprise or two is cool.
4. You’re always on time for appointments.

If you fit this profile, consider Plan B.

You’re a six-week prep student if:

 1. You buy your best friend a gift for his or her birthday, but you
need to include a belated card because you missed it by a couple
of days.
2. You work best under pressure and tight deadlines.
3. You feel very confident with the skills and background you’ve
learned in your AP Economics classes.
4. You decided late in the year to take the exam.
5. You like surprises.
6. You feel okay if you arrive 10 to 15 minutes late for an
appointment.

If you fit this profile, consider Plan C.

Table 2.1 Three Different Study Schedules

Calendar for Each Plan

Plan A: You Have a Full School Year
to Prepare
Use this plan to organize your study during the coming school year.

SEPTEMBER–OCTOBER (Check off the activities as you complete

them.)
_____ Determine the student mode (A, B, or C) that applies to you.
_____ Carefully read Chapters 1 to 4 of this book.
_____ Take the diagnostic exam.
_____ Pay close attention to your walk-through of the diagnostic
exam.
_____ Get on the Web and take a look at the AP website(s).
_____ Skim the review chapters in Step 4 of this book. (Reviewing
the topics covered in this section will be part of your yearlong
preparation.)
_____ Buy a few color highlighters.
_____ Flip through the entire book. Break the book in. Write in it.
Toss it around a little bit . . . highlight it.
_____ Get a clear picture of your own school’s AP Economics
curriculum.
_____ Begin to use this book as a resource to supplement the
classroom learning.
NOVEMBER (the first 10 weeks have elapsed)
_____ Read and study Chapter 5, “Fundamentals of Economic
Analysis.”
_____ Read and study Chapter 6, “Demand, Supply, Market
Equilibrium, and Welfare Analysis.”
DECEMBER
_____ Read and study Chapter 7, “Elasticity, Microeconomic Policy,
and Consumer Theory.”
_____ Review Chapters 5 to 6.
JANUARY (20 weeks have elapsed)
_____ Read and study Chapter 8, “The Firm, Profit, and the Costs of
Production.”
_____ Review Chapters 5 to 7.
FEBRUARY
_____ Take Microeconomics Practice Exam 1 in the first week of
February.
_____ Evaluate your Micro strengths and weaknesses.
_____ Study appropriate chapters to correct your Micro weaknesses.
_____ Read and study Chapter 9, “Market Structures, Perfect
Competition, Monopoly, and Things Between.”
_____ Review Chapters 5 to 8.
MARCH (30 weeks have now elapsed)
_____ Read and study Chapter 10, “Factor Markets.”
_____ Review Chapters 5 to 9.
APRIL
_____ Read and study Chapter 11, “Public Goods, Externalities, and
the Role of Government.”
_____ Review Chapters 5 to 10.
MAY (first two weeks) (THIS IS IT!)
_____ Review Chapters 5 to 11—all the material!
_____ Take Practice Exam 2.
_____ Score yourself.
_____ Get a good night’s sleep before the exam. Fall asleep knowing
that you are well prepared.
GOOD LUCK ON THE TEST!
 Plan B: You Have One Semester to
Prepare
If you have already completed one semester of economic studies,
the following plan will help you use those skills you’ve been
practicing to prepare for the May exam.

JANUARY–FEBRUARY
_____ Carefully read Chapters 1 to 4 of this book.
_____ Take the diagnostic exam.
_____ Pay close attention to your walk-through of the diagnostic
exam.
_____ Read and study Chapter 5, “Fundamentals of Economic
Analysis.”
_____ Read and study Chapter 6, “Demand, Supply, Market
Equilibrium, and Welfare Analysis.”
_____ Read and study Chapter 7, “Elasticity, Microeconomic Policy,
and Consumer Theory.”
_____ Take Microeconomics Practice Exam 1 in the last week of
February.
_____ Evaluate your Micro strengths and weaknesses.
_____ Study appropriate chapters to correct your Micro weaknesses.
MARCH (10 weeks to go)
_____ Read and study Chapter 8, “The Firm, Profit, and the Costs of
Production.”
_____ Read and study Chapter 9, “Market Structures, Perfect
Competition, Monopoly, and Things Between.”
_____ Review Chapters 5 to 7.
APRIL
_____ Read and study Chapter 10, “Factor Markets.”
_____ Read and study Chapter 11, “Public Goods, Externalities, and
the Role of Government.”
_____ Review Chapters 5 to 9.
MAY (first two weeks) (THIS IS IT!)
_____ Review Chapters 5 to 11—all the material!
_____ Take Microeconomics Practice Exam 2.
_____ Score yourself.
_____ Get a good night’s sleep before the exam. Fall asleep knowing
that you are well prepared.
GOOD LUCK ON THE TEST!
Another random document with
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Pizarro, Francisco, his exploits in Peru, 138.
Pizarro, Gonzalo, his march across the Andes, 140.
Plato, Emerson on, 171.
Poe, Edgar Allan: his ancestry, 189;
adoption by the Allans, 190;
education, 190;
enters West Point, 191;
early writings, 192;
marriage, 193;
editorial work, 193;
lecturing, 196;
affair of the Boston Lyceum, 197, 200;
death of his wife, 197;
proposal of marriage to Mrs. Shelton, 198;
death, 198;
character, 198;
style, 201;
criticism of his works, 203–211;
his work as a critic, 211–215;
quality of his poetry, 215.
Poems of Home and Travel, 405, 410.
Poems of the Orient, 405, 411.
Poet, The, at the Breakfast-Table, 340, 347.
Poetry, quality, of, 49;
Bryant’s theory of, 48–50;
Poe’s, 213.
Poet’s Journal, The, 405, 411.
Poets and Poetry of Europe, 225, 237.
Potiphar Papers, The, 419, 429.
Potter, Mary Storer, wife of Longfellow, 223, 224.
Prairie, The, 68, 80.
Precaution, 67.
Prentice, George, 259.
Prescott, William Hickling: his ancestry, 123;
 education, 124;
accident to his eyes, 125;
marriage, 125;
beginning of his literary work, 126;
list of his works, 127;
death, 127;
character, 128;
his style, 130;
criticism of his works, 132–143;
his aid to Motley, 361.
Prescott family, 123.
Prince Deukalion, 405, 413.
Professor, The, at the Breakfast-Table, 340, 347.
Prophet, The, 405, 413.
Prue and I, 419, 430.
Puritan and Cavalier, Bancroft’s comparison of, 111.
‘Putnam’s Magazine,’ Curtis’s connection with, 419; Lowell’s, 457.

‘Quaker Poet,’ 256.

Quakers, Longfellow’s treatment of, in John Endicott, 246;
relations of the Whittier family to, 257, 262, 272.

‘Raven, The,’ 196, 215.

Red Rover, The, 68, 71, 84, 86.
Redskins, The, 71, 95.
Representative Men, 155, 171.
Reveries of a Bachelor, 440, 443, 446, 450.
Ripley, George, 153.
Rise, The, of the Dutch Republic, 362, 369.
Rogers, Samuel, Bryant dedicates book to, 41.
Round Hill School for Boys, Bancroft’s connection with, 103, 104;
Longfellow considers buying, 224;
Motley a student at, 359.

St. Boniface, Church of, Winnipeg, honors Whittier, 263.

St. Botolph Club, Boston, Parkman’s connection with, 383.
Salmagundi, 6.
Satanstoe, 71, 95, 96.
‘Saturday Visitor, The,’ offers prizes, for which Poe competes, 192.
Scarlet Letter, The, 290, 302.
Sea Lions, The, 71, 96.
Seaside, The, and the Fireside, 225, 237.
Septimius Felton, 292, 316.
Seven Stories, 441, 447.
Shakespeare, Emerson’s estimate of, 172.
Shaw, Anna, wife of George William Curtis, 420.
Shays’s Rebellion, incident of, 102.
Simms, William Gilmore, his advice to Poe, 201.
Sketch Book, The, 7, 15, 234.
Sketches of Switzerland, Cooper’s, 94.
Smith, Goldwin, 300.
Smithell’s Hall, Bolton-le-Moors, tradition connected with, 316.
Snow Image, The, 292, 301.
Snow-Bound, 263, 267, 278.
Society and Solitude, 156, 182.
Songs of Labor, 262, 276.
‘Southern Literary Messenger, The,’ Poe’s connection with, 193.
Spanish Student, The, 225, 239.
Specimen Days and Collect, 489, 503.
Spy, The, 67, 71, 75.
Stanley, Dean, quoted, on Motley, 364.
Stedman, Edmund C., quoted on Poe, 212.
Stephen, Leslie, quoted, 32.
Story, The, of Kennett, 406.
Summer, Thoreau’s, 324, 331.
‘Sunnyside,’ Irving’s home, 9.
Supernaturalism, The, of New England, 261, 268.
Swedenborg, Emanuel, 172.
Swinburne, A. C., quotation from, applied to Whitman, 495.

Tâché, Archbishop, 263.

Tales of a Traveller, 7, 18.
Tales of a Wayside Inn, 226, 243.
Tales of the Grotesque and Arabesque, 195, 203–211.
‘Talisman, The,’ Bryant’s editorial work on, 39.
Tamerlane, 191.
Tanglewood Tales, 292, 301.
Taylor, Bayard: birth and education, 402;
travels on foot, 402;
journalistic work, 403;
extensive travels, 403;
lists of his books, 403, 405, 406;
marriages, 406;
Minister to Germany, 407;
death, 407;
character, 407;
style, 409;
criticism of his poetical works, 410–414.
Tennyson, Emerson’s attitude toward, 183.
Tent, The, on the Beach, 263, 272;
Whittier’s remark on the popularity of, 278;
scheme of, 279.
‘Thanatopsis,’ 36, 37, 57.
Thoreau, Henry David: his ancestry, 321;
early occupations, 321;
outdoor life, 322;
first book, 322;
lecturing, 323;
abolition sympathies, 323;
acquaintance with John Brown, 323;
list of his works, 324;
travels, 324;
 death, 324;
character, 325;
criticism of his works, 327–333.
Three Books of Song, 226, 245.
Three Memorial Poems, 459, 471.
Three Mile Point, Cooperstown, N. Y. controversy concerning, 69.
Ticknor, George, his friendship with Prescott, 126;
resigns professorship in favor of Longfellow, 224.
Tories of the American Revolution, Irving’s attitude towards, 29, 30.
Transcendental movement, 152, 165.
Transformation. See Marble Faun.
Travelling Bachelor, Notions of the Americans picked up by a, 68, 93.
Trumps, 419, 430.
Tucker, Ellen, wife of Ralph Waldo Emerson, 149.
Twice-Told Tales, 289, 298.
Two Admirals, The, 71, 86.

Ultima Thule, 227, 250.

United Netherlands, History of the, 362, 369, 373.
United States, Bancroft’s history of, 104, 110, 113.
‘United States Literary Gazette,’ Longfellow’s contributions to, 222.
United States Naval Academy at Annapolis, founding of, 105.
‘Upside Down, or Philosophy in Petticoats,’ 71.

Vassall Morton, 380, 381, 390.

Views Afloat, 402, 404.
Vision of Echard, The, 263, 281.
Vision of Sir Launfal, The, 456, 468.
Voices of Freedom, 261, 274.
Voices of the Night, 223, 236.
Voyages of the Companions of Columbus, 8, 22.

Walden, 323, 324, 329, 332.

Wansey, Henry, mention of his Excursion to the United States, 48.
Ware, Henry, Emerson colleague of, 149.
Washington, Irving’s life of, 28;
Lowell’s tribute to, 472.
Water-Witch, The, 68, 71, 85.
Ways of the Hour, 71, 95.
Wayside Inn, the, 244.
Weed, Thurlow, quoted, 69.
Week, A, on the Concord and Merrimack Rivers, 322, 324, 328, 331.
Wept of Wish-ton-Wish, The, 68, 71, 81.
Wet Days at Edgewood, 441, 448.
Whewell, William, makes inquiries about Evangeline, 241.
White, Maria, wife of James Russell Lowell, 455;
her death, 457.
White, T. W., his association with Poe, 193.
Whitman, Walt: his ancestry, 485;
education and early occupations, 486;
journeyings in the United States, 486;
publication of Leaves of Grass, 487;
work as army nurse and government clerk, 487;
life in Camden, N. J., 488;
list of his writings, 488;
subsidence of opposition, 489;
growth of his reputation, 490;
English admirers, 491;
his Boston publisher threatened with prosecution, 492;
criticism of his work, 492–496;
his character, 504;
mention of, in comparison with Longfellow, 250.
Whitman family, 485.
Whittier, John Greenleaf; his ancestry, 255;
boyhood, 256;
early writings, 257;
beginning of acquaintance with Garrison, 258;
 attends Haverhill Academy, 258;
editorial work, 259–261;
beginning of anti-slavery work, 259;
encounters with mobs, 260;
love of country life, 260;
lists of his works, 261, 263;
contributions to ‘Atlantic Monthly,’ 262;
overseer of Harvard College, 262;
places of residence, 262;
death, 263;
character, 264;
his literary art, 266;
criticism of his works, 269–283;
his description of Bayard Taylor, 408.
Whittier family, 255.
Wing-and-Wing, 66, 71, 86.
Winter, Thoreau’s, 324, 331.
Wolfert’s Roost, 27.
Wonder-Book, The, 292, 301.
Worsley, Philip S., quoted, 58.
Wyandotté, 71, 81.

Ximenes, Mateo, his association with Irving, 25.

Yankee, A, in Canada, 324, 331.

Year’s Life, A, 455.
 Transcriber’s Notes
Punctuation, hyphenation, and spelling were made
consistent when a predominant preference was found in the
original book; otherwise they were not changed.
Simple typographical errors were corrected; unbalanced
quotation marks were remedied when the change was obvious,
and otherwise left unbalanced.
The index was not checked for proper alphabetization or
correct page references.
Transcriber removed redundant chapter headings.
Lists of reference materials, originally printed at the bottom
of the first page of each biography, have been moved to just
after the chapter headings and labelled as “References:” by the
Transcriber.
Footnotes, originally printed at the bottoms of pages, have
been renumbered, collected, moved to the ends of their
chapters, and labelled as “Footnotes:” by the Transcriber.
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