The AP® Microeconomics exam probably seems like one of the most difficult advanced placement exams simply because most high schools don’t offer full courses on the subject. In addition, microeconomics entails a whole new introduction of themes and problems that were not covered in macroeconomics.

In reality, microeconomics is not much more difficult than macroeconomics, and they even have plenty of similarities that you already covered in your macroeconomics class. You actually have more in common with microeconomics than macroeconomics. Microeconomics is just the economics of everyday life rather than economics on a grand scale, which is why it is micro and not macro.

The College Board is aware of the fact that most students are doing self-study in order to pass the exam. This is consolation as the College Board has adapted the exam to accommodate this fact. With no further ado, let’s get into looking at how to study for AP® Microeconomics.

Exam Content

The first step to studying the subject is to look at the content of the exam. Being a self-study based exam, you need to know exactly what will be on the test in order to figure out a base from which to flesh out your AP® Microeconomics study plan. Luckily, the College Board offers a wealth of information on what should be included on a course and what the students will need to know when going into the exam.

The following is a full outline of the exam content as provided by the College Board, but with extra details on each of the subjects to help guide you through the exam.

Exam Outline

I. Basic Economic Concepts (8-14%)

It should be noted that this section is almost entirely the same as the basic economic concepts that are included in the AP® Macroeconomics exam. It wouldn’t hurt to brush up on these subjects, but they probably won’t be a priority in your studies.

1. Scarcity, choice, and opportunity cost
   • The basics of why economics exist. The scarcity of goods and costs of production. This is very important for understanding microeconomics.
2. Production Possibilities Curve
   • This is extremely important to know as you will be graphing the PPC on your exam.
3. Comparative advantage, absolute advantage, specialization, and trade
   • These concepts are not as important in microeconomics as in Macro, but they can be used to compare the way companies interact with each other.
4. Economic systems
   • You should know the basics of how economies are set up, such as knowing how capitalism works and the different types of economies. However, as in C this concept is more macro than micro.
5. Property rights and the role of incentives
   • This is a huge part of the study behind microeconomics and you should cover these in depth. It explains the importance of property and land use as well as incentives for the hierarchy in the economic system.
6. Marginal analysis
   • Another very important subject for learning microeconomics. It is the explanation of why certain goods have a value that is worth more than their utility, such as the reason water (which is important for living) costs less than diamonds (which are completely unnecessary for life).

II. The Nature and Functions of Product Markets (55%-70%)

As you can tell by the sheer content that is included on the exam, this is the bulk of how microeconomics works.

1. Supply and Demand (15-20%)
   • You will study how supply and demand control pricing and how certain goods have prices that are more elastic (easier to change) based on these two factors. Additionally, the role of taxes and the surplus in the economy. You should note that supply and demand have different determinants within AP® Microeconomics and you should review it in the context of micro.
2. Theory of consumer choice (5-10%)
   • Despite having the lowest content, this is probably the most important part of microeconomics. You will study the utility of goods and how that affects the choice of the consumer. Utility is the benefit one will get from purchasing goods that does not have to do with their intrinsic value (again, for example, diamonds versus water).
3. Production and costs (10-15%)
   • The basics of why goods are produced and the costs incurred in production in both the short run and the long run. You definitely have to look up economies of scale (an important AP® micro concept) in addition to efficiency.
4. Firm behavior and market structure (25-35%)
   • This is based off the concepts you will learn in C and it is another extremely important concept in learning how microeconomics works.
   • You need to learn about competition, monopolies, and oligopolies
   • Additionally, how firms create profits and, specifically, the MR=MC rule in profit maximization.

III. Factor Markets (10-18%)

This is the introduction of factors of production, which you might remember from macroeconomics. These are the goods that control the economy. Macroeconomics concentrates on their distribution whereas microeconomics concentrates on their value. You should concentrate on this for your studies as well.

1. Derived factor demand
   • How demand for a certain factor comes about. Be careful not to confuse this with the distinction from macroeconomics – the demand for factors in microeconomics arises from the needs to produce rather than the needs to export.
2. Marginal revenue product
   • This is based on the formula MRP = MP x MR. It means that total revenue is equal to productivity of workers times the revenue from sales of the total output of products.
3. Hiring decisions in the markets for labor and capital
   • How the markets decide who is in demand. For example, a specialized market might have demand for engineers or tailors. When it comes to labor and capital, some markets are labor intensive (such as agriculture) while others require capital investment (industry).
4. Market distribution of income
   • This is a relatively unimportant concept that describes different workers make different incomes, such as a manager making more than an employee.

IV. Market Failure and the Role of Government (12-18%)

This is a very important part of how microeconomics works. National policies drive the national economies. Whereas macroeconomics looks at grand scale concepts such as unemployment and inflation, microeconomics concentrates on how the government has a role how the economy produces. All of these concepts are important for your studies in order to fully understand how microeconomics works.

1. Externalities
   • How outside factors positively and negatively influence the economy and production. Additionally, how these externalities create a benefit or cost to society and remedies to these factors.
2. Public Goods
   • These are goods that are available to everyone. You should know the difference between public and private goods. You also need to know how they are produced and distributed.
3. Public policy to promote competition
   Look at how the government combats monopolies (antitrust laws) and regulates the economy to help promote growth. This includes the government creating incentives for specific sectors.
4. Income distribution
   • The fairness of economics (equity) especially regarding taxes and welfare programs. You will also need to measure income inequality and its causes or effects.

These concepts are your first steps to setting up your AP® Microeconomics study plan. You should take note that the percentages do not reflect the relative importance of the concepts, but rather the composition of the exam itself. We will cover the exam content in a second.

When taking the importance of the subjects into account, the basic economic concepts are probably the most important because they are the base of all other concepts in AP® Microeconomics. Other than the basics, the role of government is an important concept that you should study because microeconomics is the study of the effects of government policy on firms and the economy of a country.

Now, let’s look at the content of the exam itself. It consists of two parts and lasts a total of two hours and ten minutes.

The first part of the exam is 70 minutes long and consists of multiple choice questions. The content of the questions is based on the percentages listed above in the concepts. For example, 8-14% of all multiple choice questions will specifically have to do with basic economic concepts.

The first part is worth about 66% of the total exam grade. You can expect to spend about a minute on each question in order to finish all of them on time. Some questions will require reading graphs or using your note paper to draw graphs in order to understand the question.

The second section consists of the free response essay questions. The questions consist, generally, of a specific scenario that is presented to you. You will have to answer several questions based on that scenario. There are usually 3-5 parts per scenario, and 3 scenarios on the exam.

The proctor will give you 10 minutes to plan out your answers and then you will have 50 minutes to write down the answers themselves. The first question will take approximately half the allotted time whereas the second two will take up the rest of the time together. The second part of the exam is worth about 33% of the total grade.

An important thing to remember about the free response questions is that you will be required to create neat and legible graphs. The graphs will have to be labeled, including titles, axes, and curves. This is imperative because the graphs will be the absolute basis for your answers.

Now that we have seen the concepts the exam will cover and the content of the exam itself, you might be wondering how to study for AP® Microeconomics. Here are some points in looking into one or more AP® Microeconomics study guides and the strategies to utilize while you are studying.

Studying for the Exam

The AP® micro exam is primarily focused on how products are bought, produced and sold; how factors of production are bought and sold; and the general role of the government in the national economy. It is important to emphasize on the national economy because macroeconomics deals with how government policy affects international commerce (trade, tariffs, etc.).

Study Plan Step 1: Gauging Your Weaknesses

Your first step to these studies should be to take a practice exam to test your weak areas. You do not necessarily have to take an exam from the past because you will not be able to accurately gauge where you are weakest. A great resource is albert.io’s practice question. They are organized by subject and therefore provide the perfect starting point to organizing the rest of your study plan.

Study Plan Step 2: Organizing Your Weaknesses

Following your initial tests, you then have to work on creating a study plan that reflects your weak spots. There are two things to consider while you are planning this part out. First, you should look at the weak points as well as their relative importance on the exam. That way you can prioritize according to the relevance of the concept as well as your weakness in that concept.

For example, if you did particularly poorly regarding profit, monopolies, and competition, then you should consider the importance of each concept. While monopolies and competition are important, you will not be able to understand that concept without first looking into improving your knowledge of how profits work. Following that, you have to understand how competition works in order to understand the effects of a monopoly.

You will be able to infer the relative importance of these concepts just by looking through the list, given that it is easy to understand the relationship between the separate concepts. When in doubt, you should refer to the above outline written in this guide to gauge the importance of a concept with regards to the exam.

Finally, when considering the importance of concepts, make sure you first master the basic concepts of economics. That section is important because how you learn everything else in microeconomics rests on your understanding of that first section.

Study Plan Step 3: The Actual Study Plan

After figuring out what you need to study, you can now get to studying!

The first part of getting your study plan going involves purchasing study guides that you will use as references for the rest of your studies. Barron’s study guides are a great example of a comprehensive study guide that is based on the College Board’s structuring of microeconomics classes.

After getting your study guide of choice, you have to concentrate on studying your weak spots and mastering them. Note that during this time you should be concentrating on drawing graphs as well as studying the concepts. As previously stated, your ability to draw and understand the graphs in AP® Microeconomics will be imperative for correctly answering the FRQ.

Apart from using the study guides, you can also refer to study notes from other schools. This is a great AP® Microeconomics tip because you are most likely taking the exam without taking a class.

Most high school economics teachers still teach their students about microeconomics outside of class in order to prepare them specifically for this AP. Many of the teachers that do so publish their study guides online and provide invaluable information that you might not hear from other teachers. This is the product of teachers teaching the subject without having a formal curriculum to follow.

If you are ever in doubt regarding a specific concept or term that you see in your studies, then you should look into finding the definition of that concept to better understand what it means. Your first step to understanding microeconomics is to create the right vocabulary for yourself so you can understand the individual words that are relevant to the subject. This includes different acronyms that are used in graphs.

Overall, you should expect to study for at least 8 hours a week, or more than an hour every day. It is highly recommended that you study for even longer, considering that you are not supplementing your studies with a class that you are also taking in school. You should start studying for microeconomics after finishing macroeconomics or towards the end of your macroeconomics semester.

If your exam is directly after finishing macroeconomics, then you should start studying for microeconomics immediately after learning the basics of economics. This way, you give yourself plenty of time to understand the topics within economics.

You should note that many schools require a specific score in order to give credit for that exam. You can measure the amount you need to study in order to achieve at least the score you need. Given that microeconomics is a class without formal studies, most schools will be more strict in how you score on the exam. Some might even require a 5.

With the 8 hour a week suggestion, you can expect to get at least a 3 on the exam. That is the bare minimum for passing the exam and getting credit at some schools. For a 4 you should probably double that number for 16 hours a week. For a 5, you should consider studying for at least 24 hours a week, or a whole day a week, and concentrate a lot of your time for studying on the weekends.

The reasoning behind requiring so many hours to study comes from the fact that microeconomics is a separate topic that you will be studying without any prior experience. The studying will be intensive, but it will be worth it and it will be great when you are applying for schools.

Study Plan Step 4: Familiarize Yourself with the Exam

The College Board offers plenty of resources to familiarize you with the AP® Microeconomics exam. These include past exams as well as some other sample questions and answers to give you more details on how the exam works.

This is a step in itself because it will have a crucial role in how you study for the exam and practice answering. For example, looking at the selected past answers provided by the College Board can give insight into what the person correcting your exam is looking for.

This is especially true of the free response questions that require special care and formatting in order to answer correctly. There are several different sample free response question answers that give the reasoning behind the answer. They also help you learn the topics that they are covering.

The College Board not only provides a perfect answer, but they also provide an average and insufficient answer, along with commentary. The different answer levels will help you understand how to answer, as well as why a particular answer might be wrong. It will give you further insight into understanding what the people correcting the exams will be looking for from the start.

Finally, it will be worth it to look at the full practice exam to further familiarize yourself with the subject. The practice exam also has answers to different questions to further help you with your learning.

Study Plan Step 5: Looking at Other Media

No matter how much you pore over your AP® Microeconomics study guides and practice tests, you eventually will have to refer to other forms of media in order to introduce some diversity. If all you do is read, you will eventually have difficulty paying attention to what you are trying to learn.

The first place you can go to for a wealth of information is YouTube. There are plenty of free videos that cover various subjects for the exam.

By far the most comprehensive video series comes from the ACDC leadership microeconomics playlist. The playlist is made up of 6 other playlists that are organized according to units. The units cover the different concepts and subjects as laid out by the College Board (what we covered in the outline above).

The series is great because it is taught by Mr. Clifford, who is an actual high school economics professor. He is famous on YouTube for helping people understand economics and practice for the advanced placement exams. The series is so comprehensive that there are over 100 videos that look at the different concepts that are related to microeconomics.

Other than the ACDC leadership playlist, YouTube provides a great database for other information. Let’s say you don’t understand a specific concept, such as marginal utility. You can search for marginal utility and immediately find plenty of different videos explaining that concept.

Searching for different concepts can give you personal explanations of those concepts that will clear up any doubts you might have. That makes videos a great supplement to reading because not only will you learn the concept, but it will be explained in such a way that you can understand it better than if you just read about the concept off a page.

Most videos come complete with examples (some of which might be interactive) as well as interactive uploaders. You can sometimes make a comment on the video asking a question and they will answer you within a few days if they are still active on the website.

Study Plan Step 6: PRACTICE!!

The key to mastering your AP® Microeconomics exam is practice. You have to continually measure where you are in the class in order to make a dynamic study plan that changes with what you know and what you need to know. Let us explain what we mean.

When you take a class in school, your teachers will give you tests and quizzes, as well as homework, throughout the semester to refine your knowledge of the material. You don’t realize this because you are thinking about the overall grade of the class.

When you are studying for the microeconomics exam you have to take the same approach yourself because you don’t have the teacher to guide you. You should take tests and quizzes regarding the relevant topics you are studying at the time. That way you will be maintaining the knowledge you have learned through your studies.

Conclusion

Looking at this study guide only, you might find AP® Microeconomics discouraging. The truth of the matter is that AP® Microeconomics will be as easy as you make it. Being a course that you will be creating yourself, outside of school, you will have to give the adequate dedication and discipline into studying for the exam.

Luckily, there is a wealth of knowledge and resources on the internet that can guide you along into learning about microeconomics. With enough time dedicated to studying the subject, you will be able to work your way towards achieving a 5 and getting the college credit you need.

When you are looking into the AP® Microeconomics exam, you should go into it with an open mind. Your AP® Macroeconomics experience, if you’ve already taken the class, will already set up a basis to improve your knowledge on the subject. The great thing about the rest of the subject matter in AP® Microeconomics is the fact that it is all relevant and easy to understand. For some, it is actually easier than the overarching concepts of macroeconomics.

In conclusion, you should use discipline and dedication to focus on your studies. Make use of the resources provided by the College Board, as well as free resources from YouTube and other websites. Finally, you always have to test yourself to understand your weak spots and adjust your AP® Microeconomics study plan accordingly. That way, you will get a 5 and be able to brag about teaching yourself microeconomics.

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