the 2013 ap microeconomics exams

The 2013AP Microeconomics Exams

Dave AndersonCentre College, Chief Reader

Confidential and Proprietary –Not for Distribution

Agenda

• Exam Developers • Scores• Areas of Strength• Areas of Weakness• Discussion

Microeconomics

Committee ChairPamela M. Schmitt, United States Naval AcademyMichael A. Brody, Menlo School

Committee MembersJoyce Jacobsen, Wesleyan UniversityMargaret Ray, Mary Washington CollegeDee Mecham, The Bishop’s SchoolSandra K. Wright, Adlai E. Stevenson High School

College Board AdvisorMary Kohelis, Brooke High School

Chief ReaderDavid Anderson, Centre College

ETS Assessment SpecialistsFekru DebebeHwanwei ZhaoMarwa Hassan

Exams

54,000 U.S. Exams12,000 International Exams2,000 Alternate Exams

Mean / Standard Deviation / Max

1. Monopoly 5.57 2.7210

2. Game Theory / Oligopoly 2.551.62 5

3. Market Failure 2.82 1.60 6

Scores 2013516.7%428.4% 320.6%215.4%118.9%

Scores201214.8%28.3% 21.8%16.3%18.8%

201114.6%25.9% 21.6%16.0%21.9%

2013516.7%428.4% 320.6%215.4%118.9%

Students Did Great On• Monopoly Graph

– Profit Max Quantity where MR = MC (88%)– Price on Demand Curve above Q* (86%)



• Market Equilibrium– Price and quantity found at intersection of

Supply and Demand (88%)



• Market Equilibrium– Price and quantity found at intersection of

Supply and Demand (88%)

• Game Theory– Best strategy given other player’s move (73%)

Most Common ErrorsAP Microeconomics

2013

Overview of Trouble Spots

8. Quantity with Price Discrimination

7. QE < QS for Positive Externality

6. Relationship between MSB and D

5. Nash Equilibrium Outcomes

4. Determination of Inelastic Demand

3. Why No Dominant Strategy?

2. Show Total Revenue with Price Discrimination

1. Show Deadweight Loss on graph

8. Micro 1 (b)(i)Question: Now assume that the monopolist can perfectly price discriminate.

Using the labeling on the graph, identify the quantity produced.

8. Micro 1 (b)(i)Answer: Q3.

39.6% answered correctly

7. Micro 3 (c)(i)

Question: Now instead assume that all of the neighbors enjoy watching fireworks.

In this case, is the market equilibrium quantity of fireworks greater than, less than, or equal to the socially optimal quantity? Explain.

7. Micro 3 (c)(i)

Answer: The market equilibrium quantity is less than the socially optimal quantity because the fireworks generate a positive externality.

OR because MSB > MPB.OR because MSB > MSC at the market

quantity.

38.4% answered correctly

6. Micro 3 (b)(ii)

Question: Assume that noise from the fireworks disturbs all of the neighbors. On your graph from part (a), show each of the following.

(b) (ii) The marginal social benefit curve, labeled MSB.

(35.6% answered correctly)

6. Micro 3 (b)(ii) Answer:

Supply

PE

Quantity

Price ($)

MSC

Demand = MSB

QE

6. Micro 3 (b)(ii) Alternative Answer:

Supply = MSC

PE

Quantity

Price ($)

MSB

Demand

QE

5. Micro 2 (c)(i & ii)

Question: In the Nash Equilibrium, determine each of the following.

(i) PieCrust’s daily profit(ii) LaPizza’s daily profit

La PizzaAdvertise Not Advertise

PieCrust Advertise $250, $200 $450, $300Not Advertise $180, $500 $390, $400

5. Micro 2 (c)(i & ii)

Answer: In the Nash Equilibrium: (i) PieCrust’s daily profit is $450(ii) LaPizza’s daily profit is $300



32.4% Answered Correctly

4. Micro 1 (e)Question: Is point f in the elastic inelastic, or unit elastic portion of the demand curve? Explain.

Price

Quantity

Demand0

Marginal Revenue

Inelastic range

Elastic Range

Price

Quantity0

Total Revenue

4. Micro 1 (e)Answer: Point f is in the inelastic portion of the demand curve because MR is negative

ORbecause TR is falling as Q increases.


3. Micro 2 (b)(ii)Question: What is the dominant strategy, if any,

for LaPizza? Explain using the dollar values in the payoff matrix.



3. Micro 2 (b)(ii)



3. Micro 2 (b)(ii)

LaPizza does not have a dominant strategy because his best choice depends on the strategy chosen by PieCrust.

If PieCrust advertises, LaPizza does better by not advertising because the $300 he earns by advertising is larger than the $200 he earns by not advertising.

If PieCrust does not advertise, LaPizza does better by advertising: $500 > $400.



3. Micro 2 (b)(ii)


2. Micro 1 (b)(ii)Question: Now assume that the monopolist can perfectly price discriminate.

Using the labeling on the graph, identify the total revenue of the monopolist.

Answer: P4fQ30.


1. Micro 3 (b)(iii)

Question: Assume that noise from the fireworks disturbs all of the neighbors. On your graph from part (a), show each of the following.

(iii) The deadweight loss, if any, shaded completely.

Supply

PE

Quantity

Price ($)

Demand

QE

Supply

PE

Quantity

Price ($)

MSC

Demand = MSB

QE

16.2% Answered Correctly (credit was given for consistency with an incorrect

answer in an earlier part of the question)

Supply

PE

Quantity

Price ($)

MSC

Demand = MSB

QE

the 2013 ap microeconomics exams

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