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2024 AP Microeconomics Exam Guide

7 min readaugust 18, 2023

A Q

A Q

A Q

A Q

Your Guide to the 2024

We know that studying for your AP exams can be stressful, but Fiveable has your back! We created a study plan to help you crush your . This guide will continue to update with information about the 2024 exams, as well as helpful resources to help you do your best on test day. Unlock Cram Mode for access to our cram events—students who have successfully passed their AP exams will answer your questions and guide your last-minute studying LIVE! And don't miss out on unlimited access to our database of thousands of practice questions. FYI, something cool is coming your way Fall 2023! 👀

Format of the 2024

This year, all AP exams will cover all units and essay types. The 2024 Microeconomics exam will be a total of 2 hours and 10 minutes and the format will be:

  • Section 1: Multiple Choice (66% of score)

    • 60 questions in 1 hour and 10 minutes

  • Section 2: Free Response (33% of score)

    • 3 questions in 1 hour

      • 1 long FRQ (50% of section score)

👉 Check out the 2023 AP Microeconomics Free-Response Section posted on the College Board site.

When is the 2024 and how do I take it?

How should I prepare for the exam?

  • First, download the AP Microeconomics Cheatsheet PDF - a single sheet that covers everything you need to know at a high level. Take note of your strengths and weaknesses!

  • We've put together the study plan found below to help you study between now and May. This will cover all of the units and essay types to prepare you for your exam. Pay special attention to the units that you need the most improvement in.

  • Study, practice, and review for test day with other students during our live cram sessions via Cram Mode. Cram live streams will teach, review, and practice important topics from AP courses, college admission tests, and college admission topics. These streams are hosted by experienced students who know what you need to succeed.

Pre-Work: Set Up Your Study Environment

Before you begin studying, take some time to get organized.

🖥 Create a study space.

Make sure you have a designated place at home to study. Somewhere you can keep all of your materials, where you can focus on learning, and where you are comfortable. Spend some time prepping the space with everything you need and you can even let others in the family know that this is your study space. 

📚 Organize your study materials.

Get your notebook, textbook, prep books, or whatever other physical materials you have. Also, create a space for you to keep track of review. Start a new section in your notebook to take notes or start a Google Doc to keep track of your notes. Get yourself set up!

📅 Plan designated times for studying.

The hardest part about studying from home is sticking to a routine. Decide on one hour every day that you can dedicate to studying. This can be any time of the day, whatever works best for you. Set a timer on your phone for that time and really try to stick to it. The routine will help you stay on track.

🏆 Decide on an accountability plan.

How will you hold yourself accountable to this study plan? You may or may not have a teacher or rules set up to help you stay on track, so you need to set some for yourself. First, set your goal. This could be studying for x number of hours or getting through a unit. Then, create a reward for yourself. If you reach your goal, then x. This will help stay focused!

🤝 Get support from your peers. 

There are thousands of students all over the world who are preparing for their AP exams just like you! Join Rooms 🤝 to chat, ask questions, and meet other students who are also studying for the spring exams. You can even build study groups and review material together! 

AP Microeconomics 2024 Study Plan

💸 Unit 1: Basic Economic Concepts

Scarcity is the basic problem in economics in which society does not have enough resources to produce whatever everyone needs and wants. Basically, it is unlimited wants and needs vs. limited resources. Scarcity is faced by all societies and economic systems. Since we are faced with scarcity, we must make choices about how to allocate and use scarce resources.

Economics is the study of how individuals, firms, and governments deal with scarcity. As a result of facing scarcity, all members of a society have to make choices in an effort to manage our resources in the most efficient way possible. The choices we make are known as trade-offs.

Microeconomics is the study of how individuals, households, and firms make decisions and allocate resources. For example, whether a high school graduate chooses to go to college or directly into the workforce is a microeconomic decision👨‍💼

📰 Check out these articles:

🎥 Watch these videos from the Fiveable archives:

📈 Unit 2: Supply and Demand

Demand is defined as the different quantities of goods and services that consumers are willing and able to purchase at various price levels. Supply is the different quantities of goods and services that firms are willing and able to produce at various price levels.

📰 Check out these articles:

🎥 Watch these videos from the Fiveable archives:

 

⚙️ Unit 3: Production, Cost, and the Model

Unit 3 includes a lot of vocabulary regarding production, product costs, profit, and the model. Be sure to check the articles below for concise definitions to maximize your understanding of this unit.

📰 Check out these articles:

🎥 Watch these videos from the Fiveable archives:

📊 Unit 4: Imperfect Competition

The imperfectly competitive markets include , , and . A refers to the type of market that only has one firm that dominates the industry and sells a very unique product. Examples of monopolies include a small-town gas station, the Windows operating system for computers, DeBeers diamonds (the main diamond producer in the world), and the utility companies in your area.

An refers to a type of market where there are a few large firms that dominate the industry (usually less than 10). Some examples of oligopolies include cable television services, cereal companies, automobile manufacturing companies, and cell phone companies.

A monopolistically competitive market is one that has a large number of sellers that offer differentiated products. Examples of include restaurants, clothing companies, hairdressers, and makeup companies.

📰 Check out these articles:

💰 Unit 5: Factor Markets

In this unit, we focus on the factor market (i.e. resource market) from the Circular Flow diagram. The factor market is where the are sold by households to businesses. The are , , , and . The corresponding payments for these are rent, wage, interest, and profit. In the factor market, the demand for resources is determined (derived) by the products they help to produce. We call this concept . For example, the demand for carpenters is derived from the demand for homes. If there was a spike in demand for new houses, the demand for carpenters will increase as well.

📰 Check out these articles:

🏛 Unit 6: Market Failure and Role of Government

are the optimal distribution of all resources in society while taking into account all internal and external costs and benefits. In our study of economics, socially efficient takes place where marginal social benefit (MSB) = marginal social cost (MSC).

📰 Check out these articles:

✔ Big Reviews

Key Terms to Review (39)

AP Microeconomics exam

: The AP Microeconomics exam is a standardized test administered by the College Board that assesses students' understanding of microeconomic principles and concepts. It consists of multiple-choice questions and free-response questions.

Capital

: Capital represents all man-made goods that are used in production to create other goods and services. It includes physical assets such as machinery, equipment, tools, buildings, technology, and infrastructure.

Comparative Advantage

: Comparative advantage refers to a country's ability to produce a good or service at a lower opportunity cost compared to other countries. It is the basis for international trade and specialization.

Consumer Choice

: Consumer choice refers to the decision-making process individuals go through when selecting goods or services to purchase based on their preferences and budget constraints.

Consumer Surplus

: Consumer surplus refers to the difference between what consumers are willing to pay for a good or service and what they actually have to pay. It represents the extra benefit or value that consumers receive from purchasing a product at a price lower than their maximum willingness to pay.

Cost-Benefit Analysis

: Cost-benefit analysis is a decision-making tool that compares the costs of an action or project with its potential benefits. It helps individuals and businesses determine whether the benefits outweigh the costs, allowing them to make informed choices.

Derived Demand

: Derived demand refers to the demand for a good or service that arises from the demand for another good or service. It occurs when one product's demand depends on the demand for another product used in its production.

Entrepreneurship

: Entrepreneurship refers to the process of starting and managing a business venture, taking on financial risks in order to make a profit.

Externalities

: Externalities are the unintended consequences of economic activities that affect third parties who are not involved in the transaction. They can be positive (beneficial) or negative (harmful).

Factors of Production

: Factors of production are resources used in the production process, including labor (human effort), capital (physical tools/machinery), land (natural resources), and entrepreneurship (organizing/combining other factors).

Free Response (FRQ)

: A free response, or FRQ, is a type of question in the AP Microeconomics exam where students are required to provide a written response instead of selecting from multiple-choice options. It tests students' ability to apply economic concepts and analyze real-world scenarios.

Game Theory

: Game theory is an economic concept that analyzes strategic decision-making in situations where the outcome of one person's actions depends on the actions taken by others. It helps predict how individuals or firms will behave in competitive situations.

Government Intervention in Markets

: Government intervention in markets refers to the actions taken by the government to influence or control economic activities within a market. This can include implementing regulations, setting price controls, providing subsidies, or imposing taxes.

International Trade and Public Policy

: International trade and public policy refers to the set of rules and regulations established by governments regarding trade between countries. It involves policies related to tariffs, quotas, subsidies, and other measures that impact imports and exports.

Labor

: Labor refers to the human effort, both physical and mental, that is used in the production process. It includes all types of work performed by individuals, from manual laborers to skilled professionals.

Land

: Land refers to all natural resources used in the production of goods and services. This includes not only the physical land itself, but also any resources that come from it such as minerals, water, and timber.

Long-run Production Costs

: Long-run production costs refer to the expenses incurred by a firm for producing goods or services when all factors of production are variable and can be adjusted. In this time frame, there are no fixed inputs, allowing firms to optimize their production process and minimize costs.

Marginal Analysis

: Marginal analysis involves examining incremental changes in costs and benefits to make decisions. It compares the additional benefit gained from an action to its additional cost.

Marginal Social Benefit (MSB)

: Marginal Social Benefit refers to the additional benefit society receives from consuming one more unit of a good or service. It takes into account both the private benefit to individuals and any external benefits that accrue to society as a whole.

Marginal Social Cost (MSC)

: Marginal Social Cost refers to the additional cost imposed on society from producing one more unit of a good or service. It includes both the private cost borne by producers and any external costs that affect society as a whole.

Market Disequilibrium

: Market disequilibrium refers to a situation where the quantity demanded does not equal the quantity supplied at a given price. It creates imbalances in the market and leads to either surpluses or shortages.

Market Equilibrium

: Market equilibrium occurs when the quantity demanded by buyers equals the quantity supplied by sellers at a specific price. It represents a state of balance where there is no tendency for prices or quantities to change.

Monopolistic Competition

: Monopolistic competition refers to a market structure where there are many sellers offering differentiated products that are similar but not identical. Each firm has some degree of control over its own pricing.

Monopoly

: A monopoly refers to a market structure where there is only one seller or producer of a particular good or service, giving them complete control over the market and the ability to set prices.

Monopsonistic Markets

: Monopsonistic markets refer to markets where there is only one buyer but multiple sellers. In these markets, buyers have market power and can influence prices and quantities purchased.

Oligopoly

: An oligopoly refers to a market structure where a few large firms dominate the industry and have significant control over prices and competition.

Perfect Competition

: Perfect competition describes an idealized market structure where there are many buyers and sellers who have perfect information about prices and products. In this type of market, no single buyer or seller has the power to influence prices.

Price Discrimination

: Price discrimination refers to the practice of charging different prices for the same product or service based on various factors such as location, age, or willingness to pay. It allows businesses to maximize their profits by extracting more value from customers who are willing to pay higher prices.

Price Elasticity of Demand

: Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. It shows how sensitive consumers are to changes in price.

Price Elasticity of Supply

: Price elasticity of supply measures the responsiveness of quantity supplied to a change in price. It shows how sensitive producers are to changes in price.

Producer Surplus

: Producer surplus refers to the difference between what producers are willing to sell a good for and what they actually receive. It represents their economic gain from selling a product at a price higher than their minimum acceptable price.

Production Function

: A production function is a mathematical representation that shows the relationship between inputs (such as labor and capital) and outputs (such as goods or services) produced by a firm. It demonstrates how much output can be produced with different combinations of inputs.

Production Possibilities Curve (PPC)

: The production possibilities curve represents the maximum combination of goods or services that can be produced given limited resources and technology.

Profit Maximization

: Profit maximization refers to the process of determining the level of output that will generate the highest possible profit for a firm, taking into account both costs and revenues.

Public Goods

: Public goods are goods or services that are non-exclusionary and non-rivalrous, meaning they are available to everyone and one person's consumption does not diminish the availability for others.

Rent, Wage, Interest, Profit (as payments for factors of production)

: Rent refers to payments made for using land or other natural resources. Wage represents compensation paid for labor services. Interest denotes payment made for borrowing money or using financial capital. Profit signifies the residual income earned by entrepreneurs after deducting all costs from revenue.

Short-run Production Costs

: Short-run production costs refer to the expenses incurred by a firm for producing goods or services within a limited time frame where some factors of production are fixed (e.g., capital). These costs include both variable costs (costs that change with the level of production) and fixed costs (costs that do not change with the level of production).

Socially Efficient Market Outcomes

: Socially efficient market outcomes occur when resources are allocated in a way that maximizes overall societal welfare. It is achieved when marginal social benefit equals marginal social cost.

Types of Profit

: Types of profit refer to different ways businesses can earn income beyond their expenses. There are three types - economic profit, accounting profit, and normal profit.

2024 AP Microeconomics Exam Guide

7 min readaugust 18, 2023

A Q

A Q

A Q

A Q

Your Guide to the 2024

We know that studying for your AP exams can be stressful, but Fiveable has your back! We created a study plan to help you crush your . This guide will continue to update with information about the 2024 exams, as well as helpful resources to help you do your best on test day. Unlock Cram Mode for access to our cram events—students who have successfully passed their AP exams will answer your questions and guide your last-minute studying LIVE! And don't miss out on unlimited access to our database of thousands of practice questions. FYI, something cool is coming your way Fall 2023! 👀

Format of the 2024

This year, all AP exams will cover all units and essay types. The 2024 Microeconomics exam will be a total of 2 hours and 10 minutes and the format will be:

  • Section 1: Multiple Choice (66% of score)

    • 60 questions in 1 hour and 10 minutes

  • Section 2: Free Response (33% of score)

    • 3 questions in 1 hour

      • 1 long FRQ (50% of section score)

👉 Check out the 2023 AP Microeconomics Free-Response Section posted on the College Board site.

When is the 2024 and how do I take it?

How should I prepare for the exam?

  • First, download the AP Microeconomics Cheatsheet PDF - a single sheet that covers everything you need to know at a high level. Take note of your strengths and weaknesses!

  • We've put together the study plan found below to help you study between now and May. This will cover all of the units and essay types to prepare you for your exam. Pay special attention to the units that you need the most improvement in.

  • Study, practice, and review for test day with other students during our live cram sessions via Cram Mode. Cram live streams will teach, review, and practice important topics from AP courses, college admission tests, and college admission topics. These streams are hosted by experienced students who know what you need to succeed.

Pre-Work: Set Up Your Study Environment

Before you begin studying, take some time to get organized.

🖥 Create a study space.

Make sure you have a designated place at home to study. Somewhere you can keep all of your materials, where you can focus on learning, and where you are comfortable. Spend some time prepping the space with everything you need and you can even let others in the family know that this is your study space. 

📚 Organize your study materials.

Get your notebook, textbook, prep books, or whatever other physical materials you have. Also, create a space for you to keep track of review. Start a new section in your notebook to take notes or start a Google Doc to keep track of your notes. Get yourself set up!

📅 Plan designated times for studying.

The hardest part about studying from home is sticking to a routine. Decide on one hour every day that you can dedicate to studying. This can be any time of the day, whatever works best for you. Set a timer on your phone for that time and really try to stick to it. The routine will help you stay on track.

🏆 Decide on an accountability plan.

How will you hold yourself accountable to this study plan? You may or may not have a teacher or rules set up to help you stay on track, so you need to set some for yourself. First, set your goal. This could be studying for x number of hours or getting through a unit. Then, create a reward for yourself. If you reach your goal, then x. This will help stay focused!

🤝 Get support from your peers. 

There are thousands of students all over the world who are preparing for their AP exams just like you! Join Rooms 🤝 to chat, ask questions, and meet other students who are also studying for the spring exams. You can even build study groups and review material together! 

AP Microeconomics 2024 Study Plan

💸 Unit 1: Basic Economic Concepts

Scarcity is the basic problem in economics in which society does not have enough resources to produce whatever everyone needs and wants. Basically, it is unlimited wants and needs vs. limited resources. Scarcity is faced by all societies and economic systems. Since we are faced with scarcity, we must make choices about how to allocate and use scarce resources.

Economics is the study of how individuals, firms, and governments deal with scarcity. As a result of facing scarcity, all members of a society have to make choices in an effort to manage our resources in the most efficient way possible. The choices we make are known as trade-offs.

Microeconomics is the study of how individuals, households, and firms make decisions and allocate resources. For example, whether a high school graduate chooses to go to college or directly into the workforce is a microeconomic decision👨‍💼

📰 Check out these articles:

🎥 Watch these videos from the Fiveable archives:

📈 Unit 2: Supply and Demand

Demand is defined as the different quantities of goods and services that consumers are willing and able to purchase at various price levels. Supply is the different quantities of goods and services that firms are willing and able to produce at various price levels.

📰 Check out these articles:

🎥 Watch these videos from the Fiveable archives:

 

⚙️ Unit 3: Production, Cost, and the Model

Unit 3 includes a lot of vocabulary regarding production, product costs, profit, and the model. Be sure to check the articles below for concise definitions to maximize your understanding of this unit.

📰 Check out these articles:

🎥 Watch these videos from the Fiveable archives:

📊 Unit 4: Imperfect Competition

The imperfectly competitive markets include , , and . A refers to the type of market that only has one firm that dominates the industry and sells a very unique product. Examples of monopolies include a small-town gas station, the Windows operating system for computers, DeBeers diamonds (the main diamond producer in the world), and the utility companies in your area.

An refers to a type of market where there are a few large firms that dominate the industry (usually less than 10). Some examples of oligopolies include cable television services, cereal companies, automobile manufacturing companies, and cell phone companies.

A monopolistically competitive market is one that has a large number of sellers that offer differentiated products. Examples of include restaurants, clothing companies, hairdressers, and makeup companies.

📰 Check out these articles:

💰 Unit 5: Factor Markets

In this unit, we focus on the factor market (i.e. resource market) from the Circular Flow diagram. The factor market is where the are sold by households to businesses. The are , , , and . The corresponding payments for these are rent, wage, interest, and profit. In the factor market, the demand for resources is determined (derived) by the products they help to produce. We call this concept . For example, the demand for carpenters is derived from the demand for homes. If there was a spike in demand for new houses, the demand for carpenters will increase as well.

📰 Check out these articles:

🏛 Unit 6: Market Failure and Role of Government

are the optimal distribution of all resources in society while taking into account all internal and external costs and benefits. In our study of economics, socially efficient takes place where marginal social benefit (MSB) = marginal social cost (MSC).

📰 Check out these articles:

✔ Big Reviews

Key Terms to Review (39)

AP Microeconomics exam

: The AP Microeconomics exam is a standardized test administered by the College Board that assesses students' understanding of microeconomic principles and concepts. It consists of multiple-choice questions and free-response questions.

Capital

: Capital represents all man-made goods that are used in production to create other goods and services. It includes physical assets such as machinery, equipment, tools, buildings, technology, and infrastructure.

Comparative Advantage

: Comparative advantage refers to a country's ability to produce a good or service at a lower opportunity cost compared to other countries. It is the basis for international trade and specialization.

Consumer Choice

: Consumer choice refers to the decision-making process individuals go through when selecting goods or services to purchase based on their preferences and budget constraints.

Consumer Surplus

: Consumer surplus refers to the difference between what consumers are willing to pay for a good or service and what they actually have to pay. It represents the extra benefit or value that consumers receive from purchasing a product at a price lower than their maximum willingness to pay.

Cost-Benefit Analysis

: Cost-benefit analysis is a decision-making tool that compares the costs of an action or project with its potential benefits. It helps individuals and businesses determine whether the benefits outweigh the costs, allowing them to make informed choices.

Derived Demand

: Derived demand refers to the demand for a good or service that arises from the demand for another good or service. It occurs when one product's demand depends on the demand for another product used in its production.

Entrepreneurship

: Entrepreneurship refers to the process of starting and managing a business venture, taking on financial risks in order to make a profit.

Externalities

: Externalities are the unintended consequences of economic activities that affect third parties who are not involved in the transaction. They can be positive (beneficial) or negative (harmful).

Factors of Production

: Factors of production are resources used in the production process, including labor (human effort), capital (physical tools/machinery), land (natural resources), and entrepreneurship (organizing/combining other factors).

Free Response (FRQ)

: A free response, or FRQ, is a type of question in the AP Microeconomics exam where students are required to provide a written response instead of selecting from multiple-choice options. It tests students' ability to apply economic concepts and analyze real-world scenarios.

Game Theory

: Game theory is an economic concept that analyzes strategic decision-making in situations where the outcome of one person's actions depends on the actions taken by others. It helps predict how individuals or firms will behave in competitive situations.

Government Intervention in Markets

: Government intervention in markets refers to the actions taken by the government to influence or control economic activities within a market. This can include implementing regulations, setting price controls, providing subsidies, or imposing taxes.

International Trade and Public Policy

: International trade and public policy refers to the set of rules and regulations established by governments regarding trade between countries. It involves policies related to tariffs, quotas, subsidies, and other measures that impact imports and exports.

Labor

: Labor refers to the human effort, both physical and mental, that is used in the production process. It includes all types of work performed by individuals, from manual laborers to skilled professionals.

Land

: Land refers to all natural resources used in the production of goods and services. This includes not only the physical land itself, but also any resources that come from it such as minerals, water, and timber.

Long-run Production Costs

: Long-run production costs refer to the expenses incurred by a firm for producing goods or services when all factors of production are variable and can be adjusted. In this time frame, there are no fixed inputs, allowing firms to optimize their production process and minimize costs.

Marginal Analysis

: Marginal analysis involves examining incremental changes in costs and benefits to make decisions. It compares the additional benefit gained from an action to its additional cost.

Marginal Social Benefit (MSB)

: Marginal Social Benefit refers to the additional benefit society receives from consuming one more unit of a good or service. It takes into account both the private benefit to individuals and any external benefits that accrue to society as a whole.

Marginal Social Cost (MSC)

: Marginal Social Cost refers to the additional cost imposed on society from producing one more unit of a good or service. It includes both the private cost borne by producers and any external costs that affect society as a whole.

Market Disequilibrium

: Market disequilibrium refers to a situation where the quantity demanded does not equal the quantity supplied at a given price. It creates imbalances in the market and leads to either surpluses or shortages.

Market Equilibrium

: Market equilibrium occurs when the quantity demanded by buyers equals the quantity supplied by sellers at a specific price. It represents a state of balance where there is no tendency for prices or quantities to change.

Monopolistic Competition

: Monopolistic competition refers to a market structure where there are many sellers offering differentiated products that are similar but not identical. Each firm has some degree of control over its own pricing.

Monopoly

: A monopoly refers to a market structure where there is only one seller or producer of a particular good or service, giving them complete control over the market and the ability to set prices.

Monopsonistic Markets

: Monopsonistic markets refer to markets where there is only one buyer but multiple sellers. In these markets, buyers have market power and can influence prices and quantities purchased.

Oligopoly

: An oligopoly refers to a market structure where a few large firms dominate the industry and have significant control over prices and competition.

Perfect Competition

: Perfect competition describes an idealized market structure where there are many buyers and sellers who have perfect information about prices and products. In this type of market, no single buyer or seller has the power to influence prices.

Price Discrimination

: Price discrimination refers to the practice of charging different prices for the same product or service based on various factors such as location, age, or willingness to pay. It allows businesses to maximize their profits by extracting more value from customers who are willing to pay higher prices.

Price Elasticity of Demand

: Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. It shows how sensitive consumers are to changes in price.

Price Elasticity of Supply

: Price elasticity of supply measures the responsiveness of quantity supplied to a change in price. It shows how sensitive producers are to changes in price.

Producer Surplus

: Producer surplus refers to the difference between what producers are willing to sell a good for and what they actually receive. It represents their economic gain from selling a product at a price higher than their minimum acceptable price.

Production Function

: A production function is a mathematical representation that shows the relationship between inputs (such as labor and capital) and outputs (such as goods or services) produced by a firm. It demonstrates how much output can be produced with different combinations of inputs.

Production Possibilities Curve (PPC)

: The production possibilities curve represents the maximum combination of goods or services that can be produced given limited resources and technology.

Profit Maximization

: Profit maximization refers to the process of determining the level of output that will generate the highest possible profit for a firm, taking into account both costs and revenues.

Public Goods

: Public goods are goods or services that are non-exclusionary and non-rivalrous, meaning they are available to everyone and one person's consumption does not diminish the availability for others.

Rent, Wage, Interest, Profit (as payments for factors of production)

: Rent refers to payments made for using land or other natural resources. Wage represents compensation paid for labor services. Interest denotes payment made for borrowing money or using financial capital. Profit signifies the residual income earned by entrepreneurs after deducting all costs from revenue.

Short-run Production Costs

: Short-run production costs refer to the expenses incurred by a firm for producing goods or services within a limited time frame where some factors of production are fixed (e.g., capital). These costs include both variable costs (costs that change with the level of production) and fixed costs (costs that do not change with the level of production).

Socially Efficient Market Outcomes

: Socially efficient market outcomes occur when resources are allocated in a way that maximizes overall societal welfare. It is achieved when marginal social benefit equals marginal social cost.

Types of Profit

: Types of profit refer to different ways businesses can earn income beyond their expenses. There are three types - economic profit, accounting profit, and normal profit.


© 2024 Fiveable Inc. All rights reserved.

AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.


© 2024 Fiveable Inc. All rights reserved.

AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.