[PDF] 2014 AP Microeconomics Practice Exam MCQ Multiple Choice Questions with Answers Advanced Placement.pdf

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Filename:	[PDF] 2014 AP Microeconomics Practice Exam MCQ Multiple Choice Questions with Answers Advanced Placement.pdf
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Description:	Download file or read online AP past exam paper 2014 AP Microeconomics Practice Exam MCQ Multiple Choice Questions with Answers and FRQ Free Response Questions with Scoring Guidelines - Collegeboard Advanced Placement.

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AP ® Microeconomics Practice Exam From the 2 014 Administration This Practic e Exa m is provided by the Colleg e Boar d fo r AP Exam preparation . Teacher s ar e permitted to download the material s an d mak e copies to use wit h thei r student s in a classroo m settin g onl y. T o maintai n th e securit y of this exam , teacher s shoul d collec t al l material s afte r thei r administratio n an d keep the m in a secure location . Exam s ma y no t be poste d on schoo l or personal websites, no r electronically redistributed for an y reason. Fu rther distributio n of thes e material s outside of the secur e Colleg e Board sit e disadvantages teacher s wh o rel y on uncirculated questions for classroo m testing . An y additional distribution is in violation of the Colleg e Board ’s copyright policies an d ma y resul t in the terminatio n of Practic e Exa m acces s fo r you r schoo l as well as the removal of access to other online services such as the A P Teache r Communit y an d Onlin e Scor e Repo rts.

Contents Exam Instructions Student Answer Sheet for the Multiple -Choice Section Section I: Multiple -Choice Questions Section II: Free -Response Questions Multiple -Choice Answer Key Free- Response Scoring Guidelines Scoring Worksheet Note: This publication shows the page numbers that appeared in the 2013−14 AP Exam Instructions book and in th e actual exam. This publication was not repaginated to begin with page 1. © 2014 The College Board. College Board, Advanced Placement Program, AP, SAT and the acorn logo are registered trademarks of the College Board. All other products and services may be trademarks of their respective owners. Permission to use copyrighted College Board materials may be requested online at: www.collegeboard.com/inquiry/cbpermit.html.

Exam Instructions The following contains instructions taken from the 2013−14 AP Exam Instructions book.

61 ECO\bOMICS What Proctors Need to Bring to This Exam • . • . • . • . • . • . • .Exam .packets Answer .sheets AP .Student .Packs 2013-14 AP Coor\binator’s Manual . This .book .— .AP Ex am I nstructions School .Code .and .Home-School/Self- Stu dy .C odes Pencil .sharpener • . • . • . • . • . • . . .– . – . Extra .No . .2 .pencils .with .erasers Extra .pens .with .black .or .dark .blue .ink Lined .paper Stapler Watch Signs .for .the .door .to .the .testing .room “Exam .in .Progress” .“Cell .phones .are .prohibited .in .the . testi ng .room” SECTION I: Multiple Choice ! Do not begin the exam instructions below until you have completed the appropriate General Instructions \bor your group. Make .sure .you .begin .the .exam .at .the .designated .time . . Macroeconomics If you are giving the regularly sche\bule\b exam, say: It is Thursday morning, May 15, and you will be taking the AP Macroeconomics Exam. If you are giving the alternate exam for late testing, say: It is Wednesday morning, May 21, and you will be taking the AP Macroeconomics Exam. Microeconomics If you are giving the regularly sche\bule\b exam, say: It is Thursday afternoon, May 15, and you will be taking the AP Microeconomics Exam. If you are giving the alternate exam for late testing, say: It is Wednesday afternoon, May 21, and you will be taking the AP Microeconomics Exam. AP® Macroeconomics/Microeconomics Exam Regul\brly Scheduled Ex\bm D\bte: Thursd\by morning, M\by 15, 2014 L\bte-Testing Ex\bm D\bte: Wednesd\by morning, M\by 21, 2014 Section I Tot\bl Time, M\bcroeconomics: 1 hr. 10 min. Section II Tot\bl Time, M\bcroeconomics: 1 hr. Section I Tot\bl Time, Microeconomics: 1 hr. 10 min. Section II Tot\bl Time, Microeconomics: 1 hr.

62 Economics In a moment, you will open the packet that contains your exam materials. By opening this packet, you agree to all of the AP Program’s policies and procedures outlined in the 2013-14 Bulletin for AP Students and Parents. \bou may now remove the shrinkwrap from your exam packet and take out the Section I booklet, but do not open the booklet or the shrinkwrapped Section II materials. Put the white seals aside. . . . Carefully remove the AP Exam label found near the top left of your exam b ooklet cover. Now place it on page 1 of your answer sheet on the light blue box near the top right-hand corner that reads “AP Exam Label.” If .students .accidentally .place .the .exam .label .in .the .space .for .the .number .label .or .vice .versa, .advise . them .to .leave .the .labels .in .place . .They .should .not .try .to .remove .the .label; .their .exam .will .be . processed .correctly . . Read the statements on the front cover of Section I and look up when you have finished. . . . Sign your name and write today’s date. Look up when you have finished. . . . Now print your full legal name where indicated. Are there any questions? . . . Turn to the back cover and read it completely. Look up when you have finished. . . . Are there any questions? . . . Section I is the multiple-choice portion of the exam. \bou may never discuss these specific multiple-choice questions at any time in any form with anyone, including your teacher and other students. If you disclose these questions through any means, your AP Exam score will be canceled. Are there any questions? . . . \bou must complete the answer sheet using a No. 2 pencil only. Mark all of your responses beginning on page 2 of your answer sheet, one response per question. Completely fill in the circles. If you need to erase, do so carefully and completely. No credit will be given for anything written in the exam booklet. Scratch paper is not allowed, but you may use the margins or any blank space in the exam booklet for scratch work. Calculators are not allowed on any part of this exam. Are there any questions? . . . \bou have 1 hour and 10 minutes for this section. Open your Section I booklet and begin. 12 6 3 9 .Note .Start .Time .here . . .Note .Stop .Time .here . . .Check .that .students .are . marking .their .answers .in .pencil .on .their .answer .sheets, .and .that .they .are .not .looking .at .their . shrinkwrapped .Section .II .booklets . .After .1 .hour .and .10 .minutes, .say: . Stop working. Close your booklet and put your answer sheet on your desk, face up. Make sure you have your AP number label and an AP Exam label on page 1 of your answer sheet. I will now collect your answer sheet.

63 AP Exam Instructio\Bns ECO\bOMICS Collect .an .answer .sheet .from .each .student . .Check .that .each .answer .sheet .has .an .AP .number .label . and .an .AP .Exam .label . .Then .say: . Now you must seal your exam booklet. Remove the white seals from the backing and press one on each area of your exam booklet cover marked “PLACE SEAL HERE.” Fold each seal over the back cover. When you have finished, place the booklet on your desk, face up. I will now collect your Section I booklet. . . . Collect .a .Section .I .booklet .from .each .student . .Check .that .each .student .has .signed .the .front .cover . . of .the .sealed .Section .I .booklet . There .is .a .10-minute .break .between .Sections .I .and .II . .When .all .Section .I .materials .have .been . collected .and .accounted .for .and .you .are .ready .for .the .break, .say: . Please listen carefully to these instructions before we take a 10-minute break. Everything you placed under your chair at the beginning of the exam must stay there. Leave your shrinkwrapped Section II packet on your desk during the break. \bou are not allowed to consult teachers, other students, or textbooks about the exam during the break. \bou may not make phone calls, send text messages, check email, use a social networking site, or access any electronic or communication device. Remember, you are not allowed to discuss the multiple-choice section of this exam. If you do not follow these rules, your score could be canceled. Are there any questions? . . . 126 3 9 \bou may begin your break. Testing will resume at . SECTION II: Free Response After .the .break, .say: . May I have everyone’s attention? Place your Student Pack on your desk. . . . \bou may now remove the shrinkwrap from the Section II packet, but do not open the exam booklet until you are told to do so. . . . Read the bulleted statements on the front cover of the exam booklet. Look up when you have finished. . . . Now place an AP number label on the shaded box. If you don’t have any AP number labels, write your AP number in the box. Look up when you have finished. . . . Read the last statement. . . . Using your pen, print the first, middle and last initials of your legal name in the boxes and print today’s date where indicated. This constitutes your signature and your agreement to the statements on the front cover. . . . Turn to the back cover and complete Item 1 under “Important Identification Information.” Print the first two letters of your last name and the first letter of your first name in the boxes. Look up when you have finished. . . . In Item 2, print your date of birth in the boxes. . . .

64 Economics In Item 3, write the school code you printed on the front of your Student Pack in the boxes. . . . Read Item 4. . . . Are there any questions? . . . I need to collect the Student Pack from anyone who will be taking another AP Exam. \bou may keep it only if you are not taking any other AP Exams this year. If you have no other AP Exams to take, place your Student Pack under your chair now. . . . While Student Packs are being collected, read the information on the back cover of the exam booklet. Do not open the booklet until you are told to do so. Look up when you have finished. . . . Collect .the .Student .Packs . .Then .say: Are there any questions? . . . Section II begins with a 10-minute reading period. During the reading period, you will read and plan what you will write. \bou may use page 3 and the pages the questions are printed on to take notes or plan your answers. Are there any questions? . . . \bou may now begin the 10-minute reading period. 126 3 9 .Note .Start .Time .here . . .Note .Stop .Time .here . . .Check .that .students .are . writing .any .notes .in .the .appropriate .areas .in .the .Section .II .booklet . .If .any .students .begin .writing . their .responses .during .this .time, .remind .them .that .the .reading .period .is .not .yet .over, .and .that . the .reading .period .is .designed .to .provide .students .with .time .to .develop .better .organized, .higher . scoring .responses . .If .the .students .choose .to .continue .writing .responses, .take .no .further .action . . After .10 .minutes, .say: . Stop. The reading period is over. \bou have 50 minutes to complete Section II. \bou are responsible for pacing yourself, and may proceed freely from one question to the next. \bou must write your answers in the Section II booklet using a pen with black or dark blue ink. \bou are not permitted to use other colored pens or pencils to draw graphs or diagrams. If you need more paper during the exam, raise your hand. At the top of each extra piece of paper you use, be sure to write only your AP number and the number of the question you are working on. Do not write your name. Are there any questions? . . . \bou may begin. 12 6 3 9 .Note .Start .Time .here . . .Note .Stop .Time .here . . .Check .that .students .are . using .pens .and .that .they .are .writing .their .answers .in .their .exam .booklets . .After .\b0 .minutes, .say: . There are 10 minutes remaining. After .10 .minutes, .say: . Stop working and close your exam booklet. Place it on your desk, face up. . . .

65 AP Exam Instructio\Bns ECO\bOMICS If .any .students .used .extra .paper .for .the .free-response .section, .have .those .students .staple .the .extra . sheet/s .to .the .first .page .corresponding .to .that .question .in .their .exam .booklets . .Then .say: Remain in your seat, without talking, while the exam materials are collected. . . . Collect .a .Section .II .booklet .from .each .student . .Check .for .the .following: . • .Exam .booklet .front .cover: .The .student .placed .an .AP .number .label .on .the .shaded .box, .and . p rinted .his .or .her .initials .and .today’s .date . . • .Ex am .booklet .back .cover: .The .student .completed .the .“Important .Identification . Information” .area . When .all .exam .materials .have .been .collected .and .accounted .for, .return .to .students .any .electronic . devices .you .may .have .collected .before .the .start .of .the .exam . . If you are giving the regularly sche\bule\b exam, say: \bou may not discuss or share these specific free-response questions with anyone unless they are released on the College Board website in about two days. \bour AP score results will be available online in July. If you are giving the alternate exam for late testing, say: None of the questions in this exam may ever be discussed or shared in any way at any time. \bour AP score results will be available online in July. If .any .students .completed .the .AP .number .card .at .the .beginning .of .this .exam, .say: Please remember to take your AP number card with you. \bou will need the information on this card to view your scores and order AP score reporting services online. Then .say: \bou are now dismissed. All .exam .materials .should .be .put .in .secure .storage .until .they .are .returned .to .the .AP .Program . after .your .school’s .last .administration . .Before .storing .materials, .check .the .“School .Use .Only” . section .on .page .1 .of .the .answer .sheet .and: . . • .Fill .in .the .appropriate .section .number .circle .in .order .to .access .a .separate .AP . . I nstructional .Planning .Report .(for .regularly .scheduled .exams .only) .or .subject . . score .roster .at .the .class .section .or .teacher .level . .See .“Post-Exam .Activities” .in .the . . 2013-14 AP Coor\binator’s Manual . . • .Check .your .list .of .students .who .are .eligible .for .fee .reductions .and .fill .in .the . . appropriate .circle .on .their .registration .answer .sheets . .

Student Answer Sheet for the Multiple -Choice Section Use this section to capture student responses. (Note that the following answer sheet is a sample, and may differ from one used in an actual exam. )

Sign your legal name as it will\. appear on your college applic\.ations. Date To maintain the security of the exam and the validity of my AP score, \b will allow no one else to see the multiple-choice questions. \b will seal the multiple-choice booklet when asked to do so, and \b will not discuss these questions with anyone at any time after completing the section. \b am aware of and agree to the AP Program’s policies and procedures as outlined in the 2013-14 Bulletin for AP Students and Parents, including using testing accommodations (e.g., extended time, computer, etc.) only if \b have been preapproved by College Board Services for Students with \vDisabilities.COMPLETE THIS AREA AT EVERY EXAM. USE NO. 2 PENCIL ONLY A. SIGNATURE GE 1AP anuyC\bFu \bGHI JKLMFueHNOPMQuluRMMTIHOU\. anu.VFGHLu \bGHIuJKLMFueOVWHQOun\bNTU OHHZeuLHY 1 X B Q – a D Rpu yAa u.agy iFPOu\b2MXOLM2ZHX3u4Lp3ullp H5\bIu6PLXOu.\bFHu7u6PLXOuBDu HOOHLX H5\bIu \bXOu.\bFHu7u6PLXOuB8u HOOHLX gl A A A A A A A A A A A A A A A B B B B B B B B B B B B B B B C C C C C C C C C C C C C C C D D D D D D D D D D D D D D D \b \b \b \b \b \b \b \b \b \b \b \b \b \b \b F F F F F F F F F F F F F F F G G G G G G G G G G G G G G G H H H H H H H H H H H H H H H I I I I I I I I I I I I I I I J J J J J J J J J J J J J J J K K K K K K K K K K K K K K K L L L L L L L L L L L L L L L M M M M M M M M M M M M M M M N N N N N N N N N N N N N N N O O O O O O O O O O O O O O O P P P P P P P P P P P P P P P Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q R R R R R R R R R R R R R R R S S S S S S S S S S S S S S S T T T T T T T T T T T T T T T U U U U U U U U U U U U U U U V V V V V V V V V V V V V V V W W W W W W W W W W W W W W W X X X X X X X X X X X X X X X Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z – – – – – – – – – – – – – 1 2 3 4 5 6 7 8 9 A A A A A A A A A A A A A B B B B B B B B B B B B B C C C C C C C C C C C C C D D D D D D D D D D D D D \b \b \b \b \b \b \b \b \b \b \b \b \b F F F F F F F F F F F F F G G G G G G G G G G G G G H H H H H H H H H H H H H I I I I I I I I I I I I I J J J J J J J J J J J J J K K K K K K K K K K K K K L L L L L L L L L L L L L M M M M M M M M M M M M M N N N N N N N N N N N N N O O O O O O O O O O O O O P P P P P P P P P P P P P Q Q Q Q Q Q Q Q Q Q Q Q Q R R R R R R R R R R R R R S S S S S S S S S S S S S T T T T T T T T T T T T T U U U U U U U U U U U U U V V V V V V V V V V V V V W W W W W W W W W W W W W X X X X X X X X X X X X X Y Y Y Y Y Y Y Y Y Y Y Y Y Z Z Z Z Z Z Z Z Z Z Z Z Z – – – – – – – – – – 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 0 0 1 1 2 2 3 3 4 5 6 7 8 9 6 12 7 1 8 2 9 3 10 4 11 5 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 S 9puuywagu9aoy Spuuticmuanu.cgRym Month AM PM F. MULTIPLE-CHOICE BOOKL\NET SERIAL NUMBER rpuuanuywaguluagu oahl.Aucel.Auorleu a.exymueryyo \bxam Name: Form Code: Form: COMPLETE THIS AREA ONLY ONCE. SCHOOL USE ONLY Fee Reduction Gr\bnted Section Number Option 1 Option 2 E. EXAM START TIME 0 0 1 1 2 3 4 5 6 7 8 9 1 2 773898 0 0 0 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 6 6 6 7 7 7 8 8 8 9 9 9 G. ONLINE PROVIDER CODE Day 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 L. SOCIAL SECURITY NUMBER (Option\bl) 99735-00657• UNLW\bB114 Q3779/1-4 COLLEGE CODE 0 0 0 0 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 6 6 6 6 7 7 7 7 8 8 8 8 9 9 9 9 M. COLLEGE TO RECEIVE YOUR AP SCORE REPORT College Name State Country Using the college \.code listed in the AP Student Pack, indicate the ONE college that you want to receive your AP score report. City SCHOOL CODE 0 0 0 0 0 0 1 1 1 1 1 1 2 2 2 2 2 2 3 3 3 3 3 3 4 4 4 4 4 4 5 5 5 5 5 5 6 6 6 6 6 6 7 7 7 7 7 7 8 8 8 8 8 8 9 9 9 9 9 9 School Name State Country J. SCHOOL YOU ATTEND City 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 INTERNATIONAL PHONE I. AREA CODE AND PHONE NUMBER 0 0 0 0 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 5 5 5 6 6 6 7 7 7 8 8 8 9 9 9 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month Day Year K. DATE OF BIRTH .puuScmmy.ou Ama9yu ysy Not yet in 9th grade 9th 10th 11th 12th No longer in high school B123456789T

P. LANGUAGE — Do not complete this section unle\Nss instructed to do so. 1 2 34 5 67 8 9 A B C D \b F G H I A B C D \b F G H I A B C D \b F G H I A B C D \b F G H I A B C D \b F G H I A B C D \b F G H I A B C D \b F G H I A B C D \b F G H I A B C D \b F G H I If this \bnswer sheet is for the French L\bngu\bge \bnd Culture, Germ\bn L\bngu\bge \bnd Culture, It\bli\bn L\bngu\bge \bnd Culture, Sp\bnish L\bngu\bge \bnd Culture, or Sp\bnish Liter\bture \bnd Culture Ex\bm, ple\bse \bnswer the following questions. Your responses will not \bffect your score. 1. Have you lived or studied for one month or mo\.re in a country where the language of \.the exam you are now taking is spoken? Yes No DO NOT WRITE IN THIS AREA O. SURVEY QUESTIONS — Answer the survey questions in the \NAP Student P\bck. Do not put responses to ex\bm questions in this\N section. PAGE 2 COMPLETE THIS AREA AT EACH EXAM (IF APPLICABLE) Indic\bte your \bnswers to the ex\bm questions in this\N section (p\bges 2 \bnd 3). M\brk only one response per question\N. If \b question h\bs onl\Ny four \bnswer options, do not m\brk option E. Answers written in the multiple-choice booklet will not be scored. A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b A B C D \b 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 5051 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 QUESTIONS 1–75 Yes No 2. Do you regularly speak or hear th\.e language at home\.? L GL 1L xL 2 L GL 1L xL 2 You must use \b No. 2 pencil \bnd m\brks must be complete. Do not use \b mech\bnic\bl pencil. It is very important that you fill in the entire circle darkly and completely. If you change your response, erase as completely as possible. Incomplete marks or erasures may affect your score. COMPLETE MARK EXAMPLES OF INCOMPLETE MARKS

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Section I: Multiple -Choice Questions This is the multiple -choice section of the 2014 AP exam. It includes cover material and other administrative instructions to help familiarize students with the mechanics of the exam. (Note that future exams may differ in look from the following content.)

AP ® Microeconomics Exam SECTION I: Multiple Choice 2014 DO NOT OPEN THIS BOOKLET UNTIL YOU ARE TOLD TO DO SO. At a Glance Total Time 1 hour, 10 minutes Number of Questions 60 Percent of Total Score 66.67% Writing Instrument Pencil required Instructions Section I of this exam contains 60 multiple-choice questions. Fill in only the circles for numbers 1 through 60 on your answer sheet. Indicate all of your answers to the multiple- choice questions on the answer sheet. No credit will be given for anything written in this exam booklet, but you may use the booklet for notes or scratch work. After you have decided which of the suggested answers is best, completely fill in the corresponding circle on the answer sheet. Give only one answer to each question. If you change an answer, be sure that the previous mark is erased completely. Here is a sample question and answer. Use your time effectively, working as quickly as you can without losing accuracy. Do not spend too much time on any one question. Go on to other questions and come back to the ones you have not answered if you have time. It is not expected that everyone will know the answers to all of the multiple- choice questions. Your total score on the multiple- choice section is based only on the number of questions answered correctly. Points are not deducted for incorrect answers or unanswered questions. Form I Form Code 4JBP6-S 34

-2- The inclusion of source material in this exam is not intended as an endorsement by the College Board or ETS of the content, ideas, or values expressed in the material. The material has been selected by the economics faculty who serve on the AP Microeconomics Development Committee. In their judgment, the material printed here reflects various aspects of the course of study on which this exam is based and is therefore a ppropriate to use to measure the skills and knowledge of this course.

MICROECONOMICS Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -3- MICROECONOMICS Section I Time —70 minutes 60 Questions Directions: Each of the questions or inco mplete statements below is followe d by five suggested answers or completions. Select the one that is best in each case and then fill in the corresponding circle on the answer sheet. 1. Improvements in technology for producing all goods must result in (A) an inward shift in the production possibilities curve (B) an out ward shift in the production possibilities curve (C) a flatter production possibilities curve (D) a steeper production possibilities curve (E) greater unemployment of labor 2. The quantity of peanuts supplied increased from 40 tons per week to 60 tons per week when the price of peanuts increased from $4 per ton to $5 per ton. The price elasticity of supply for peanuts over this price range is (A) elastic (B) inelastic (C) unit elastic (D) perfectly elastic (E) perfectly inelastic 3. Which of the following best describes the law of demand? (A) The price of a good increases when the demand for the good increases. (B) The price of a good decreas es when the supply of the good decreases. (C) When the price of a good increases, its demand decreases. (D) When the price of a good decreases, its quantity demanded increases. (E) Demand creates its own supply. 4. Assume that ice cream is a normal good. If the price of ice cream decreases, the substitution effect and the income effect will lead to which of the following changes in ice cream consumption? Substitution Effect Income Effect (A) Increase Decrease (B) Increase Increase (C) Increase No change (D) Decrease Increase (E) Decrease No change 5. Short-run marginal costs eventually increase because of the effects of (A) increasing marginal product (B) diminishing marginal product (C) diseconomies of scale (D) economies of scale (E) increasing fixed costs 6. If a government eliminated an effective price floor in a market, all of the following would occur EXCEPT: (A) The surplus would be eliminated. (B) The price would decrease. (C) The quantity supplied would decrease. (D) The quantity demanded would increase. (E) The supply of the good would increase.

7. Which of the following must be true if a firm is experiencing economies of scale? Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -4- (A) All costs are explicit. (B) Long-run average total cost decreases as the firm’s output increases. (C) Economic profits decrease as the firm’s output increases. (D) Long-run average total cost remains constant as the firm’s output decreases. (E) Proportionate increases in inputs result in less-than-proportionate increases in output. 8. Compared to a perfectly competitive industry with the same demand and cost curves, a monopoly’s price and output will be which of the following? Price Output (A) The same Higher (B) Higher The same (C) Higher Lower (D) Lower The same (E) Lower Higher 9. If the demand for a good is perfectly price inelastic in the short run and the supply curve is upward sloping, imposing a sales tax on t he good will (A) leave the price paid by consumers unchanged (B) decrease the after-tax revenues received by suppliers (C) increase the after-tax revenues received by suppliers (D) not change the after-tax revenues received by suppliers (E) not change the total expenditures by consumers on the good 10. The characteristic of oligopolistic firms that makes them different from all other types of firms is that oligopolistic firms (A) are regulated by a state agency or federal agency (B) consider each other’s decisions (C) advertise their products (D) produce differentiated products (E) produce identical products 11. For the firm shown in the graph above, the short- run, profit-maximizing strategy would be to set output at (A) Q 1, price at P 1, and suffer a loss (B) Q 1, price at P 3, and earn an economic profit (C) Q 1, price at P 3, and earn only a normal profit (D) Q 2, price at P 2, and earn an economic profit (E) Q 2, price at P 2, and earn only a normal profit 12. Which of the following will tend to make the demand for a product more elastic? (A) New firms which produce similar products enter the industry. (B) A change in taste and preferences makes the product more desirable. (C) The product is necessary for use with a complement. (D) Production of the product is protected by a patent. (E) Production co st of the product decreases. 13. In a perfectly competitive labor market, an increase in an effective minimum wage will result in (A) an increase in the supply of workers (B) a decrease in the supply of workers (C) a decrease in the demand for workers (D) more workers being hired (E) fewer workers being hired

14. Which of the following taxes contributes most to decreasing inequality in the distribution of income? Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -5- (A) Progressive income taxes (B) Sales taxes (C) Proportional income taxes (D) Excise taxes (E) Import tariffs on necessities 15. A free-rider problem arises when a good is (A) nonrival (B) nondepletable (C) nonexcludable (D) produced in a competitive market (E) produced in a monopolistic market 16. According to the production possibilities curve above, which of the following is true? (A) The opportunity cost of producing another unit of good Y in terms of good X increases as more of good Y is produced. (B) The opportunity cost of producing another unit of good Y in terms of good X decreases as more of good Y is produced. (C) The opportunity cost of producing another unit of good X in terms of good Y increases as more of good X is produced. (D) The opportunity cost of producing another unit of good X in terms of good Y decreases as more of good X is produced. (E) The opportunity cost of producing another unit of either good remains constant as the production of the other good increases. 17. Which of the following is true in a capitalist economy? (A) The factors of production are collectively owned. (B) The factors of production are distributed according to needs. (C) The prices of goods and services are usually determined by the government. (D) The prices of goods and services are set so that an equitable distribution of private property is achieved. (E) Prices serve as incentives for factors of production to move to the markets where they are most valued. 18. A city transit authority increases the price of sub- way and bus tickets from $1.25 to $1.50. If the demand for these tickets is price inelastic, the number of people riding buses and subways and the city’s revenues will most likely change in which of the following ways? Number of People Riding City’s Revenues (A) Increase Increase (B) Decrease Increase (C) Decrease Decrease (D) Decrease Remain constant (E) Remain constant Increase 19. The difference between what consumers are willing to pay for units of a good and the price consumers actually pay for units of the good is called (A) marginal utility (B) producer surplus (C) consumer surplus (D) economic rent (E) a positive externality

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -6- 20. Which of the following is true if consuming one unit of a good yields 100 utils and consuming the second unit of the good increases satisfaction by 20 utils? (A) The marginal utility of the first unit is 20. (B) The marginal utility of the second unit is 80. (C) The marginal utility of the second unit is 120. (D) The total utility of consuming two units is 120. (E) The total utility of consuming one unit is greater than the total utility of consuming two units. 21. If a new tax on capital increases a firm’s fixed cost of production, which of the following will occur in the short run? (A) Marginal cost will increase. (B) Average variable cost will increase. (C) Average total cost will increase. (D) The profit-maximizing level of output will increase. (E) The profit-maximizing level of output will decrease. � The marginal product of labor equals 250 units of output. � The marginal product of capital equals 750 units of output. � The price of labor is $50 p er person. � The price of capital is $100 per unit. 22. Given the information above, which of the following is true for a firm buying its labor and capital inputs in a perfectly competitive market? (A) The firm is producing its current level of output with the least-cost combination of labor and capital. (B) The firm is maximizing profits with its current combination of inputs. (C) The firm’s level of output will remain the same if 1 unit of capital is substituted for 2 units of labor. (D) The firm’s input costs will decrease if 2 units of labor are substituted for 1 unit of capital. (E) The firm can reduce the cost of its current level of output by laying off workers and employing more capital. 23. At 100 units of output, a firm’s total cost is $10,000. If the firm’s total fixed cost is $4,000, its average variable cost is equal to (A) $140 (B) $100 (C) $60 (D) $40 (E) $0 24. Which of the following statements correctly identifies a difference between perfect competition and monopolistic competition? (A) In perfect competition there are no barriers to entry, but there are strong barriers in monopolistic competition. (B) In perfect competition there are many firms, but in monopolistic competition there are only a few firms. (C) In perfect competition the firms all sell products that are exactly the same, but in monopolistic competition each firm sells a slightly differentiated product. (D) In perfect competition firms maximize profit by selling the quantity where marginal revenue equals marginal cost, but in monopolistic competition firms maximize profit by selling the quantity where marginal revenue exceeds marginal cost. (E) In perfect competition there are few consumers, but in monopolistic competition there are many consumers. 25. The most profitable level of output for any firm operating in the short run is the level of output at which (A) marginal revenue exceeds marginal cost by the highest amount (B) marginal revenue equals marginal cost (C) price exceeds average cost by the highest amount (D) price equals average cost (E) price equals marginal cost

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -7- 26. For an unregulated monopolist, the profit- maximizing quantity will always be (A) in the elastic region of the demand curve (B) where marginal revenue equals price (C) where price equals average total cost (D) where price equals marginal cost (E) where the marginal co st curve intersects the demand curve 27. If a per-unit tax is imposed on a monopolist, how will the monopolist’s marginal cost curve, output, and the price paid by consumers be affected? Marginal Cost Output Price (A) Shift down Increase Decrease (B) Shift down Decrease Decrease (C) No shift Decrease Decrease (D) Shift up Decrease Increase (E) Shift up Increase Increase 28. The demand curve for labor for a monopolist that faces a perfectly competitive factor mark et is called the (A) average product curve (B) marginal product curve (C) marginal revenue curve (D) marginal revenue product curve (E) value of the average product curve Number of Workers Parts per Week 0 0 1 100 2 190 3 270 4 340 5 400 6 450 7 480 29. The table above descri bes the production function of an auto parts manufacturer. Assume that the firm can hire as many workers as it wants at the market wage rate of $600 per week per worker and sell as many auto parts as it wants at the price of $10 per part. To maximize profits, the firm should hire (A) 0 workers (B) 1 worker (C) 3 workers (D) 5 workers (E) 7 workers 30. Monopolistically compe titive firms are considered inefficient in allocating society’s resources for which of the following reasons? (A) In equilibrium, the marginal benefit exceeds the price charged by the firms. (B) In equilibrium, the marginal benefit exceeds the marginal cost of production. (C) In equilibrium, the marginal revenue of the firm is not equal to its marginal cost. (D) In long-run equilibrium, the firm is earning economic profits. (E) Firms exhibit significant market power and therefore the number of firms in the industry is strictly limited.

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -8- 31. As a factor of production, capital refers to the (A) money available to start a business (B) stocks and bonds issued by businesses to raise funds (C) financial investment of businesses (D) currency in circulation and deposits in financial institutions (E) tools and machinery used to produce goods and services 32. Which of the following wil l cause the supply curve for shoes to shift to the right? (A) An increase in the price of socks, assuming that shoes and socks are complements (B) A decrease in the price of sandals, assuming that shoes and sandals are substitutes (C) An increase in the wages of shoe workers (D) An increase in the number of firms producing shoes (E) A decrease in the income of consumers, assuming that shoes are normal goods 33. The diagram above de picts demand and supply curves in a city’s rental housing market. If a price ceiling of $1,000 is imposed on the market, which of the following will occur? (A) There will be a surplus of rental housing in the city. (B) The demand curve for housing will shift to the right. (C) The supply cu rve for housing will shift to the right. (D) The quantity of rental housing supplied will decrease. (E) The quantity of rental housing demanded will increase. 34. For consumers, assume that fish sticks and tacos are substitutes. Which of the following graphs illustrates the effect on the taco market if the price of fish sticks increases? (A) (B) (C) (D) (E)

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -9- Questions 35-36 refer to the graph below for a representative firm in a perfectly competitive, constant-cost industry, which shows the firm’s marginal cost (MC), average total cost (ATC), and average variable cost (AVC). 35. In the short run, the firm will realize an economic loss but will continue to produce if the price is (A) below P1 (B) between P1 and P2 (C) below P2 (D) between P2 and P3 (E) between P3 and P4 36. Which of the following MUST be true in the long run? (A) The equilibrium price will be P2, since that is where marginal cost equals minimum average variable cost. (B) The equilibrium price will be above P3, since firms must make an economic profit to stay in business. (C) If the price is above P2, new firms will enter the industry. (D) If the price is above P3, new firms will enter the industry. (E) If the price is above P4, firms will exit the industry. 37. Which of the following MUST be true of the long run? (A) It is at least one year in duration. (B) All factors of production are variable. (C) At least one factor of production is fixed. (D) Marginal costs are constant. (E) Average total costs are constant. 38. In order for a firm to engage in price discrimi-nation, it must be (A) able to separate consumers into different groups based on demand elasticities (B) producing in the inelastic portion of its demand curve to raise its price and increase total revenue (C) a price taker (D) experiencing economies of scale in the relevant range of production (E) experiencing constant marginal cost 39. Which of the following market structures results in allocative efficiency? (A) Monopoly (B) Monopolistic competition (C) Perfect competition (D) Natural monopoly (E) Oligopoly

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -10- 40. The following table shows the profits associated w ith the pricing strategies of two oligopolistic firms, Agronomia and Farmingdale. Each firm has two possible strategies: to charge a low price or a high price. The first entry in each cell shows the profits to Ag ronomia and the second the profits to Farmingdale. Farmingdale charges high price. Farmingdale charges low price. Agronomia charges high price. $150, $150 $50, $300 Agronomia charges low price. $300, $50 $100, $100 If the two firms do not cooperate, as a result of the firms’ pricing decisions the profits of each firm will be which of the following? Agronomia’s Profit Farmingdale’s Profit (A) $50 $100 (B) $150 $150 (C) $300 $50 (D) $100 $100 (E) $300 $300

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -11- 41. Which of the following will occur in a perfectly competitive labor market if Firm X’s demand for labor decreases? Equilibrium Market Wage Rate Employment by Firm X (A) Increase Increase (B) No change No change (C) No change Decrease (D) Decrease Decrease (E) Decrease No change 42. The graph above shows the marginal revenue product (MRP) and the market wage rate for a profit-maximizing firm. Which of the following is true of the firm’s hiring of labor? (A) It should hire 15 workers. (B) It should hire between 15 and 40 workers. (C) It should hire 40 workers. (D) It should hire between 40 and 90 workers. (E) It should hire 90 workers. 43. Which of the following best defines a pure public good? (A) A good that is provided free of charge to the public (B) A good that is provided by the government, whether or not a fee is charged (C) A good that is efficiently produced only by a monopoly (D) A good whose benefits can be enjoyed by many consumers at the same time and from which consumers cannot be excluded (E) A good that by law must be available to all consumers without discrimination on the basis of sex, race, or religion 44. A perfectly competitive manufacturing industry pollutes public water in its production process, leaving the water unsuitable for use by the surrounding communities. At the market equilibrium output level, which of the following is true? (A) Marginal private cost exceeds marginal social cost. (B) Marginal private cost exc eeds marginal private benefit. (C) Marginal social cost exceeds marginal social benefit. (D) The market equilibrium output is equal to the socially efficient output. (E) The market equilibrium output is less than the socially efficient output. 45. Assume that under new environmental regulations, tire companies have to pay taxes based on how much pollution is created when producing each tire. The price paid by consumers and the quantity of tires sold will most likely change in which of the following ways? Price Quantity (A) Increase Decrease (B) Increase Increase (C) Decrease Increase (D) Decrease Decrease (E) No change No change

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -12- 46. The market for goldfish is perfectly competitive. From year 1 to year 2, both the price and the quantity of goldfish sold increase. This is most likely caused by (A) an increase in the supply (B) a decrease in the supply (C) an increase in the demand (D) a decrease in the demand (E) a decrease in both the demand and the supply 47. Using the same amount of time and resources, Jack can assemble either 10 bikes or 5 computers, whereas Sam can assemble either 5 bikes or 5 computers. Based on the data, which of the following statements is correct? (A) Sam has an absolute advantage in assembling bikes. (B) Sam has an absolute advantage in assembling computers. (C) Sam has a comparative advantage in assembling bikes. (D) Jack has a comparative advantage in assembling bikes. (E) Jack has a comparative advantage in assembling both bikes and computers. 48. Given an increase in the price of mat erial K — which is an input used to produce good X — and an increase in the price of good Y — which is a substitute for good X — which of the following will definitely occur? (A) The equilibrium price of good X will decrease. (B) The equilibrium price of good X will increase. (C) The equilibrium quantity of good X will be unaffected. (D) The equilibrium quantity of good X will increase. (E) The equilibrium quantity of good X will decrease. 49. An entrepreneur has earned enough total revenue to cover her accounting costs, but economic losses are being incurred. What must be true? (A) Her accounting costs are larger than her economic costs. (B) Her accounting profits are less than her implicit costs. (C) Her accounting profits are greater than her economic costs. (D) Her economic losses are less than her total fixed costs. (E) Her implicit costs are less than her accounting costs. 50. If nations specialize according to their comparative advantage and engage in international trade with each other, each nation can (A) produce outside its production possibilities curve (B) consume outside its production possibilities curve (C) shift its production possibilities curve to the right (D) become more self-sufficient (E) produce more of all goods 51. When total physical pr oduct is at its maximum, marginal physical product must be (A) greater than one (B) equal to one (C) equal to zero (D) less than zero (E) constant

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -13- 52. Garcia is currently spending his entire lunch budget on 3 sodas and 4 hot dogs. At his current level of consumption, Garc ia’s marginal utility for sodas is 5 utils and his marginal utility for hot dogs is 10 utils. In order to maximize his total utility, Garcia should (A) consume more sodas and fewer hot dogs regardless of the prices (B) consume more hot dogs and fewer sodas regardless of the prices (C) maintain his current level of consumption of sodas and hot dogs regardless of the prices (D) maintain his current level of consumption if the price of a soda is $1 and the price of a hot dog is $2 (E) maintain his current level of consumption if the price of a soda is $2 and the price of a hot dog is $1 53. As output of a firm increases, the difference between the firm’s average total cost and its average variable cost gets smaller because the firm’s (A) total cost is increasing (B) marginal cost is increasing (C) average fixed cost is decreasing (D) marginal product of labor is decreasing (E) long-run average total cost is decreasing 54. In a perfectly compe titive market, a change in which of the following could cause a shift in the supply curve? (A) The incomes of consumers (B) The number of buyers (C) Technology (D) The price of the product (E) Tastes and preferences 55 . Productive efficiency occurs when a firm produces output at a level at which (A) average total cost equals average revenue (B) average total cost is at a minimum (C) price exceeds average total cost (D) price equals marginal cost (E) marginal revenue exceeds average revenue 56. Which of the following is true of a monopolisti- cally competitive firm in long-run equilibrium? (A) Price equals marginal cost and average total cost. (B) Price equals average total cost but is greater than marginal cost. (C) Price equals marginal cost and is greater than average total cost. (D) The firm makes no attempt to differentiate its products. (E) The firm earns positive economic profits by producing at minimum average cost. 57 . Assume that firms sell their output in a perfectly competitive product market and hire labor in a perfectly competitive labor market. If all other factors remain constant, an increase in the demand for the firms’ product will result in which of the following changes in the labor market? (A) Firms will move down along the demand curve for labor and hire more workers. (B) The supply curve for labor will shift to the right. (C) The demand curve for labor will shift to the right. (D) The supply curve for labor will shift to the left. (E) The demand curve for labor will shift to the left. 58. A profit-maximizing firm will continue to hire workers until the (A) marginal factor cost of labor is equal to the marginal revenue product of labor (B) marginal factor cost of labor is equal to the price of the good produced using labor (C) marginal product of labor is equal to the marginal revenue product of labor (D) marginal product of labor is equal to the marginal factor cost of labor (E) marginal product of labor is equal to the price of labor

Unauthorized copying or reuse of any part of this page is illegal. -14- 59. Assume that the marginal social benefit of the last unit of vaccination provided is greater than the marginal social cost. Which of the following can be used to achieve efficiency in the market for vaccination? (A) A per-unit subsidy for vaccinations (B) A lump-sum tax for vaccinations (C) A limit on the quantity of vaccinations (D) A price floor for vaccinations (E) A price ceiling for vaccinations 60. Which of the following government actions can correct the inefficiency caused by the existence of a monopoly? (A) Granting a per-unit subsidy on the monopolist’s output (B) Granting an annual lump-sum subsidy to the monopolist (C) Imposing a per-unit tax on the monopolist’s output (D) Imposing a price floor on the monopolist (E) Limiting the monopolist's production through regulation END OF SE CTION I IF YOU FINISH BEF ORE TIME IS CALLED, YOU MAY CHECK YOUR WORK ON THIS SECTION. DO NOT GO ON TO S ECTION II UNTIL YOU ARE TOLD TO DO SO. MAKE SU RE YOU HAVE DONE THE FOLLOWING. • PLACED YOUR AP NUMBER LABEL ON YOUR ANSWER SHEET • WRITTEN AND GRIDDED YOUR AP NUMBER CORRECTLY ON YOUR ANSWER SHEET • TAKEN THE AP EXAM LABEL FROM THE FRONT OF THIS BOOKLET AND PLACED IT ON YOUR ANSWER SHEET

Section I I: Free- Response Questions This is the free-response section of the 2014 AP exam. It includes cover material and other administrative instructions to help familiarize students with the mechanics of the exam. (Note that future exams may differ in look from the following content.)

AP ® Microeconomics Exam SECTION II: Free Response 2014 DO NOT OPEN THIS BOOKLET UNTIL YOU ARE TOLD TO DO SO. At a Glance Total Time 1 hour Number of Questions 3 Percent of Total Score 33.33% Writing Instrument Pen with black or dark blue ink Reading Period Time 10 minutes. Use this time to read the questions and plan your answers. Writing Period Time 50 minutes Question 1 Suggested Time 25 minutes Percent of Section II Score 50% Question 2 Suggested Time 12.5 minutes Percent of Section II Score 25% Question 3 Suggested Time 12.5 minutes Percent of Section II Score 25% Instructions The questions for Section II are printed in this booklet. You may use page 3 and the pages the questions are printed on to organize your answers and for scratch work , but you must write your answers on the lined pages provided for each question. The proctor will announce the beginning and end of the reading period. You are advised to spend the 10- minute period reading all the questions and planning your answers. Do NOT begin writing on the lined pages until the proctor tells you to do so . Write clearly and legibly. Do not skip lines. Cross out any errors you make; crossed- out work will not be scored. Manage your time carefully. You may proceed freely from one question to the next. You may review your responses if you finish before the end of the exam is announced . Form I Form Code 4JBP6-S 34

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -3- MICROECONOMICS Section II Planning time — 10 minutes Writing time — 50 minutes Directions: You have 10 minutes to read all of the questions in this booklet, to sketch graphs, to make notes, and to plan your answers. You will then have 50 minutes to answer all three of the following questions. It is suggested that you spend approximately half your time on the first question and divide the remaining time equally between the next two questions . In answering the questions, you should emphasize the line of reasoning that generated your results; it is not enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. Use a pen with black or dark blue ink. Question 1 begins on page 4. Question 2 begins on page 10. Question 3 begins on page 14. THIS PAGE MAY BE USED FOR TA KING NOTES AND PLANNING YOUR ANSWERS. NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED. WRITE ALL YOUR RESPONSES ON THE LINED PAGES.

Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -4- 1. Assume soybeans are produced by a pe rfectly competitive, constant-cost industry. Fresh Farm is a typical firm producing soybeans and is currently operating with an economic loss. (a) Using a correctly labeled graph for Fresh Farm , show each of the following in the short run. (i) The marginal cost curve and average to tal cost, labeled MC and ATC, respectively (ii) Fresh Farm’s price and loss-minimizing quantity, labeled PF and QF, respectively (iii) The average variable cost curve, labeled AVC (b) Suppose that newspapers have re cently reported that excessive soybean consumption can cause health problems. As a result, will the new loss-minimizing quan tity for Fresh Farm be greater than, less than, or equal to QF in the short run? Explain. (c) Is the long-run market supply for soybeans perfectly inelastic, relatively inelastic, unit elastic, relatively elastic, or perfectly elastic? (d) Assume now that the soybean market is in a long- r un equilibrium and that fertilizers used in soybean production cause water pollution. Using a correctly labeled graph for the soybean market, show each of the following. (i) Market equilibrium quantity and price, labeled QM and PM (ii) Marginal social cost curve, labeled MSC (iii) Socially optimal quantity, labeled QS (iv) The area representing deadwe ight loss, shaded completely THIS PAGE MAY BE USED FOR TAKING NOTES AND PLANNING YOUR ANSWERS. NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED. WRITE ALL YOUR RESPONSES ON THE LINED PAGES.

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Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -6- Question 1 is reprinted for your convenience. 1. Assume soybeans are produced by a pe rfectly competitive, constant-cost industry. Fresh Farm is a typical firm producing soybeans and is currently operating with an economic loss. (a) Using a correctly labeled graph for Fresh Farm , show each of the following in the short run. (i) The marginal cost curve and average total cost, labeled MC and ATC, respectively (ii) Fresh Farm’s price and loss-minimizing quantity, labeled PF and QF, respectively (iii) The average variable cost curve, labeled AVC (b) Suppose that newspapers have re cently reported that excessive soybean consumption can cause health problems. As a result, will the new loss-minimizing quan tity for Fresh Farm be greater than, less than, or equal to QF in the short run? Explain. (c) Is the long-run market supply for soybeans perfectly inelastic, relatively inelastic, unit elastic, relatively elastic, or perfectly elastic? (d) Assume now that the soybean market is in a long- run equilibrium and that fertilizers used in soybean production cause water pollution. Using a correctly labeled graph for the soybean market, show each of the following. (i) Market equilibrium quantity and price, labeled QM and PM (ii) Marginal social cost curve, labeled MSC (iii) Socially optimal quantity, labeled QS (iv) The area representing deadwe ight loss, shaded completely THIS PAGE MAY BE USED FOR TAKING NOTES AND PLANNING YOUR ANSWERS. NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED. WRITE ALL YOUR RESPONSES ON THE LINED PAGES.

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Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -10- 2. The graph above shows the pe rfectly competitive corn market. (a) Between the prices of $9 and $11, is the demand for corn relatively elastic, perfectly elastic, unit elastic, relatively inelastic, or perfectly inel astic? Explain using specific values. Suppose the government is considering different programs to help corn farm ers in the market represented above. (b) Program 1: The government establishes a price floor at $11. How much corn will be purchased by consumers? (c) Program 2: The government guarantees a market pric e of $11 by purchasing all the surplus corn. How much corn will the government need to purchase? (d) Program 3: The government pays farmers to switch to wheat production. Redraw the graph of the corn market above including the numbers, and show the shift that illustrates how paying farmers to switch to wheat production can achieve a market price of $11 for corn. (e) Program 4: The government successfully markets corn as an export. (i) Explain how increasing exports can achieve a market price of $11. (ii) Calculate the producer surplus when the governme nt successfully raises the price of corn to $11 by marketing it as an export. Show your work. THIS PAGE MAY BE USED FOR TAKING NOTES AND PLANNING YOUR ANSWERS. NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED. WRITE ALL YOUR RESPONSES ON THE LINED PAGES.

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Unauthorized copying or reuse of any part of this page is illegal. GO ON TO THE NEXT PAGE. -14- 3. Schmitt’s Bakery sells cookies in a perfectly compet itive market and hires workers from a perfectly competitive labor market. Labor is the only variable input for Sc hmitt’s Bakery. The table below shows the workers hired per day, quantity of cookies produced per day, and to tal costs per day for Schmitt’s Bakery. The price of a cookie is $0.50. Number of Workers Hired Quantity of Cookies Total Cost 0 0$10 1 45$25 2 105 $40 3 145 $55 4 180 $70 5 195 $85 6 200 $100 (a) When the firm hires the third worker, does it experience diminishing marginal returns? (b) What is the marginal revenue product of the third worker? (c) Based on the figures in the tabl e above, what is the wage rate? (d) What is the profit-maximizing number of workers? (e) If the demand for cookies increases, will Schmitt’s Bakery hire more, fewer, or the same number of workers? Explain. THIS PAGE MAY BE USED FOR TAKING NOTES AND PLANNING YOUR ANSWERS. NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED. WRITE ALL YOUR RESPONSES ON THE LINED PAGES.

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GO ON TO THE NEXT PAGE. -16- ADDITIONAL PAGE FOR ANSWERING QUESTION 3

GO ON TO THE NEXT PAGE. -17- ADDITIONAL PAGE FOR ANSWERING QUESTION 3

-18- STOP END OF EX AM THE FOLLOWIN G INSTRUCTIONS APPLY TO THE COVERS OF THE SECTION II BOOKLET. • MAKE SURE YOU HAVE COMPLETED THE IDENTIFICATION INFORMATION AS REQUESTED ON THE FRONT AND BACK COVERS OF THE SECTION II BOOKLET. • CHECK TO SEE THAT YOUR AP NUMBER LABEL APPEARS IN THE BOX(ES) ON THE COVER(S). • MAKE SURE YOU HAVE USED THE SAME SET OF AP NUMBER LABELS ON ALL AP EXAMS YOU HAVE TAKEN THIS YEAR.

Multiple -Choice Answer Key The following contains the answers to the multiple -choice questions in this exam .

Answer Key for AP Microeconomics Practice Exam, Section I Question 1: B Question 2: A Question 3: D Question 4: B Question 5: B Question 6: E Question 7: B Question 8: C Question 9: D Question 10: B Question 11: B Question 12: A Question 13: E Question 14: A Question 15: C Question 16: E Question 17: E Question 18: B Question 19: C Question 20: D Question 21: C Question 22: E Question 2 3: C Question 2 4: C Question 25 : B Question 2 6: A Question 2 7: D Question 2 8: D Question 2 9: D Question 30: B Q uestion 31: E Question 32: D Question 33: E Question 34: A Question 35: D Question 36: D Question 37: B Question 38: A Question 39: C Question 40: D Question 41: C Question 42: E Question 43: D Question 44: C Question 45 : A Question 46: C Question 47: D Question 48: B Question 49: B Question 50: B Question 51: C Question 52: D Question 53: C Question 54: C Question 55: B Question 56 : B Question 57 : C Question 58: A Question 59: A Question 60: A

Free- Response Scoring Guidelines The following contains the scoring guidelines for the free- response questions in this exam .

AP ® MICROECONOMICS 2014 SCORING GUIDELINES Question 1 10 Points (4+1+1+4) (a) 4 poin ts: • One poi nt is earned for showing an upward sloping MC curve going through the minimum point of the ATC curve. • One poi nt is earned for a correctly labeled graph of the typical firm, Fresh Farm, with a horizontal demand curve below ATC, showing P F. • One point is earned for showing the profit -max imizing quantity, QF at MC=MR or MC=P if P is horizontal. • One point is earned for showing the AVC curve below the price line at QF. (b) 1 p oi nt: • One p oint is earned for stating that the new quantity will be less than QF, sin ce demand decreases or price decreases. (c) 1 p oi nt: • One p oint is earned for stating that the long -run market supply for soybeans is perfectly elastic. © 2014 The College Board. All rights reserved. Visit the College Board on the Web: www.collegeboard.com.

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