AP Microeconomics Last-Minute Review (Night Before)

The exam is tomorrow. This is not the time to learn new material — it's time to skim, reset, and sleep. Spend 30-45 minutes on this page, then put your notes away.

Essential formulas (memorize cold)

Concept	Formula
Price elasticity of demand	$PED = \frac{\%\Delta Q_d}{\%\Delta P}$ (midpoint: $\frac{(Q_2-Q_1)/[(Q_1+Q_2)/2]}{(P_2-P_1)/[(P_1+P_2)/2]}$ )
Profit	$(P - ATC) \times Q$ (profit if positive; loss if negative)
Profit max (general)	$MR = MC$
Perfect competition	$P = MR = AR = MC$ (at equilibrium)
Consumer surplus	$\frac{1}{2} \times \text{base} \times \text{height}$ (triangle above price, below demand)
Producer surplus	$\frac{1}{2} \times \text{base} \times \text{height}$ (triangle below price, above supply)
Deadweight loss (monopoly)	$\frac{1}{2} \times \Delta Q \times \Delta P$ (triangle between demand and MC, from monopoly Q to efficient Q)
Average total cost	$ATC = \frac{TC}{Q}$
Marginal cost	$MC = \frac{\Delta TC}{\Delta Q}$
MRP (labor demand)	$MRP = MP \times P$ (marginal product × output price)
Tax incidence	$\text{Consumer bears} = \frac{\text{elasticity of supply}}{\text{elasticity of supply} + \text{elasticity of demand}}$ (larger elasticity bears less of tax)

Graph templates to sketch in your mind

Perfect Competition Firm:

Horizontal demand line at market price $P^*$ .
U-shaped ATC and AVC below demand.
MC curve intersecting ATC and AVC at minimums.
Mark MR = MC intersection; drop to Q axis.

Monopoly Firm:

Downward-sloping demand.
MR line below demand (drops twice as fast).
MC curve (usually upward or flat).
MR = MC intersection ⟹ quantity; then move UP to demand curve for price.
Deadweight loss = triangle between demand and MC, from monopoly Q to competitive Q.

Supply & Demand with Tax:

Original S&D equilibrium.
Tax shifts supply UP by tax amount (or demand down, depending on who pays).
New equilibrium is higher price (consumers pay part) + lower quantity.
Deadweight loss = triangle on the "squeeze" side between original and new equilibrium.

Externality (Negative):

Demand curve (private benefits).
Supply curve (private cost = MPC).
MSC curve above supply (includes external cost).
Market equilibrium: $P = D \cap S$ (too much quantity, because external cost ignored).
Social optimum: $P = D \cap MSC$ (less quantity, where social cost equals benefit).

Elasticity quick reference

Type	Formula	Interpretation
Price elastic	$\\|PED\\| > 1$	1% price change → >1% quantity change; steep demand curve
Price inelastic	$\\|PED\\| < 1$	1% price change → <1% quantity change; flat demand curve
Unit elastic	$\\|PED\\| = 1$	1% price change → exactly 1% quantity change; total revenue constant
Income elastic	$\\|YED\\| > 1$	Normal good (luxury): quantity increases more than income increases
Income inelastic	$\\|YED\\| < 1$	Normal good (necessity) or inferior good; quantity increases less than income
Cross elastic (+)	Substitutes	Price of one up → demand for other up (e.g., butter ↔ margarine)
Cross elastic (−)	Complements	Price of one up → demand for other down (e.g., coffee ↔ cream)

Top 10 traps that cost real points

"Shift" vs "movement along curve": determinant changes = shift; price change = movement. These are NOT the same.
Confusing $MR = MC$ with $P = MC$ : $MR = MC$ applies to ALL profit-maximizing firms. $P = MC$ ONLY in perfect competition (because $P = MR$ there).
Wrong profit rectangle: profit is from ATC line up to P line, width = Q. NOT from origin (0) to P.
Unlabeled graphs lose half the points: label demand, supply, MC, MR, ATC, equilibrium, deadweight loss. Always.
Forgetting MR line in monopoly graphs: drawing only demand + MC will cost you the entire profit section.
Deadweight loss shaded backwards: DWL is the lost surplus from inefficiency, NOT the tax revenue or consumer/producer surplus.
Elasticity sign confusion: $PED$ is always negative (demand slopes down). Report magnitude: $|PED| = 2$ is elastic.
Shutdown rule backwards: Shut down if $P < AVC$ (can't even cover variable costs). If AVC < P < ATC, operate short-term and cover variable costs.
Long-run entry/exit not explained: saying "firms enter" is wrong without stating WHY (profit exists, so entry; loss exists, so exit).
Units dropped on calculations: elasticity is unitless, but revenue, cost, and surplus have units ($, units, etc.).

Perfect competition vs monopoly (biggest exam confusion)

Factor	Perfect Competition	Monopoly
Price-taker or price-maker?	Price-taker ( $P = MR$ )	Price-maker ( $P > MR$ )
Profit max rule	$MR = MC$ (same as monopoly, but $P = MR$ , so $P = MC$ )	$MR = MC$ (but $MR < P$ )
Long-run profit	Zero (entry/exit until $P = \text{min ATC}$ )	Can be positive (barriers to entry prevent competition)
Allocative efficiency	Yes ( $P = MC$ )	No ( $P > MC$ , underproduction)
Productive efficiency	Yes (produce at min ATC)	No (often excess capacity or larger-than-min ATC)

Calculator tips for exam day

Leave at least 3 decimal places on intermediate calculations to avoid rounding error.
Check your formula before entering: elasticity numerator is % change in quantity (top), denominator is % change in price (bottom).
Graph on your calculator: set window and zoom to see equilibrium intersection clearly.
Don't trust rounded intermediate steps: e.g., if you round $10.33 to $10, errors compound.

Score boundaries (recent years)

Approximate ranges out of 120 total points:

5: ~80+
4: ~65-79
3: ~48-64
2: ~35-47
1: below ~35

You only need ~67% correct to score a 5. You can leave several questions blank and still earn the top score. Don't panic if a problem stumps you.

Morning-of checklist

☐ 8 hours of sleep (non-negotiable — your brain consolidates short-term memory overnight).
☐ Real breakfast: protein + slow-carb carbs (eggs, oatmeal, not just sugar).
☐ 2 sharpened #2 pencils, black/blue pen (FRQ responses).
☐ Approved graphing calculator (TI-84 or equivalent) + fresh batteries + spare batteries.
☐ Photo ID + AP ID label sheet.
☐ Water bottle, light snack for the break.
☐ Watch (without alarm) if your testing room doesn't have a visible clock.
☐ Arrive 30 minutes early. Seriously.

During the exam strategy

Multiple-choice section (60 min, 60 Qs):

Mark and skip any question taking >90 seconds. Come back after you finish the rest.
Process of elimination: cross out obviously wrong answers first.
Watch for "not" and "except" language (flip the logic).
On calculator section: use graph + intersect function aggressively for equilibrium problems.

FRQ section (60 min, 3 Qs):

Read all 3 FRQs first. Start with the one you're most confident on (usually not the first).
Allocate time: ~15 min for 10-pt FRQ, ~6-8 min per 5-pt FRQ.
Draw the graph FIRST, even if not explicitly asked. It often clarifies the scenario.
Label everything: axes, curves, equilibrium, units, shading.
Show your work: even partial credit on calculation saves points.
Don't leave questions blank. Set up an integral, define variables, explain your reasoning — partial credit accumulates.

Last thing

You've prepared. Trust the work. A rested brain reads graphs correctly, doesn't flip supply and demand, and spots traps. Show up 30 minutes early, breathe between sections, and remember: the rubric wants to give you points. Your job is clarity.

Good luck. You've got this. 🎯

Need focused help? Browse the AP Microeconomics topic library →, revisit the FRQ practice guide →, or try the 3-day plan → for quick drills.