Table of Contents
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Part I Using This Book to Improve Your AP Score 1
Preview: Your Knowledge, Your Expectations 2
Your Guide to Using This Book 2
How to Begin 3
Part II About the AP Economics Exams 5
The Structure of the AP Economics Exams 6
How the AP Economics Exams Are Scored 6
Overview of Course Units and Big Ideas 8
How AP Exams Are Used 9
Other Resources 9
Designing Your Study Plan 10
Part 111 Test-Taking Strategies for the AP Economics Exams 11
Preview 12
1 How to Approach Multiple-Choice Questions 13
2 How to Approach Free-Response Questions 23
3 Using Time Effectively to Maximize Points 31
4 Pacing Drills 35
Reflect 45
Part IV Content Review for the AP Economics Exams 47
Review of Microeconomics Concepts 49
5 Basic Microeconomics Concepts 51
Scarcity: The Nature of Economic Systems 53
Specialization and Comparative Advantage 57
The Nature and Functions of Product Markets 59
Key Terms 64
Chapter 5 Drill Questions 65
Summary 67
6 Supply, Price Determination, and Firm Behavior 69
Understanding and Manipulating Supply 70
The Functions of An Economic System 71
Marginal Product and Diminishing Returns 74
Product Pricing and Outputs 82
Game Theory 93
Key Terms 98
Chapter 6 Drill Questions 100
Summary 103
7 Demand, Elasticity, and the Factors of Production 107
Understanding and Manipulating Demand 108
Measuring Consumer Preference 112
Elasticity 115
Factor Markets 126
Key Terms 131
Chapter 7 Drill Questions 132
Summary 133
8 The Role of Government and Microeconomics 137
Systems of Government and Economic Decisions 138
Basic Government interventions 138
Responding to Market Failure 143
Externalities 146
Distribution of Income 150
Key Terms 152
Chapter 8 Drill Questions 153
Summary 155
9 Microeconomics Drill Questions: Answers and Explanations 157
Review of Macroeconomics Concepts 167
10 Basic Macroeconomics Concepts 169
Measurement of Economic Performance 170
Inflation and Price Indices 171
Unemployment 174
National Income and Price Determination 175
Key Terms 182
Chapter 10 Drill Questions 183
Summary 184
11 Aggregate Demand and Multipliers 187
Circular Flow 188
Components of Aggregate Demand 189
Equilibrium of AD and AS 192
Key Terms 198
Chapter 11 Drill Questions 199
Summary 200
12 Money and Fiscal Policy 203
Money and Banking 204
Fiscal Policy 208
Fiscal-Monetary Mix 216
Deficits 220
Key Terms 221
Chapter 12 Drill Questions 222
Summary 224
13 Currency Exchange, inflation, and Growth 229
International Currency Exchange 230
Economic Growth 238
Key Terms 239
Chapter 13 Drill Questions 240
Summary 241
14 Macroeconomics Drill Questions: Answers and Explanations 243
Part V Practice Tests 249
15 Microeconomics Practice Test 1 251
16 Microeconomics Practice Test 1: Answers and Explanations 265
17 Macroeconomics Practice Test 1 277
18 Macroeconomics Practice Test 1: Answers and Explanations 297
Microeconomics Practice Test 2 online
Microeconomics Practice Test 2: Answers and Explanations online
Macroeconomics Practice Test 2 online
Macroeconomics Practice Test 2: Answers and Explanations online
Appendix: Formula Sheets 313
