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AP Micro Ultimate Cheat Sheet Key

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4K views3 pages

AP Micro Ultimate Cheat Sheet Key

Uploaded by

Andra Iulia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Microeconomics

Ultimate Cheat Sheet


Formulas

Utility Maximizing Rule: Average Total Cost =

Percent Change = Average Variable Cost =

Elasticity Demand/Supply = Average Fixed Cost =

Cross-Price Elasticity = Total Revenue = ​Price x quantity

Income Elasticity = Profit = ​Total revenue - Total cost

Consumer Surplus = Profit Maximizing Rule: ​MR = MC

Marginal Product = Least Cost Rule:

Marginal Cost = Marg. Revenue Product =

Total Cost = Marginal Factor Cost =

Things to Remember
Comparative advantage-​ A country makes a good at a lower ​opportunity cost​ than another country
Elasticity- When price elasticity of demand coefficient is greater than 1, the demand is ​elastic
When price elasticity of demand coefficient is less than 1, the demand is ​inelastic
When price elasticity of demand coefficient is zero, the demand is ​perfectly inelastic
When the cross-price elasticity is positive, the two goods are ​substitutes
When the income elasticity is positive, the product is a ​normal good
Total revenue test-​ When demand is inelastic, an increase in the price will ​increase​ the total revenue
Double shifts-​ When two curves shift at the same time, either price or quantity will be ​indeterminate
Price controls-​ To be biding, price ceilings go ​below​ equilibrium and price floors go ​above​ equilibrium
Costs-​ Use marginal cost to determine the ​quantity to produce​. Use average total cost to calculate ​profit
Perfect competition-​ In the product market, marginal revenue is horizontal because firms are ​price takers
Shut-down rule-​ Firms should shut down if the price falls below the ​average variable cost
Monopolies-​ Price is higher and output is lower than competitive markets causing ​deadweight loss
Factor markets-​ In competitive markets, marginal factor cost is horizontal because firms are ​wage takers
Government Regulation-​ A lump sum tax does not change quantity because it only affects the​ ​fixed cost
Negative externalities-​ Too much output is made because the MSC is ​greater​ than marginal private cost
Positive externalities-​ Too little output is made because the MSB is ​greater​ than marginal private benefit

© Copyright Jacob Clifford 2020. ​Ultimate Review Packet


Do NOT post online. Teachers- ​Contact me​ if you want to use this with your students
Microeconomics
Ultimate Cheat Sheet
Essential Graphs
Production Possibilities Curve Supply and Demand (CS + PS) Price Ceiling (CS, PS, DWL)

Tax (Tax Revenue and DWL) Perfect Competition (Firm, Profit) Perfect Comp (Firm, Long-run)

Elastic and Inelastic Ranges Monopoly (Profit, DWL) Monopolistic Comp (Long-run)

Perf. Competitive Labor (Firm) Negative Externality (DWL) Positive Externality (DWL)

© Copyright Jacob Clifford 2020. ​Ultimate Review Packet


Do NOT post online. Teachers- ​Contact me​ if you want to use this with your students
Microeconomics
Ultimate Cheat Sheet
Additional Graphs and Concepts
Supply and Demand (Trade) MC, ATC, AVC (Shut Down) Total, Variable, & Fixed Cost

Long-Run ATC Payoff Matrix (Dominant Strategy, Nash Equilibrium)

Perfect Competition (Loss) Monopoly (Loss) Perfect Price Discrimination

Monopsony Natural Monopoly Lorenz Curve

© Copyright Jacob Clifford 2020. ​Ultimate Review Packet


Do NOT post online. Teachers- ​Contact me​ if you want to use this with your students

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