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Unformatted text preview: ollegeboard.org. AP Central is the official online home for the AP Program: apcentral.collegeboard.com. 2011 AP® MICROECONOMICS FREE-RESPONSE QUESTIONS (Form B) MICROECONOMICS Section II Planning time— 10 minutes Writing time—50 minutes Directions: You 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. 1. Suppose that roses are produced in a perfectly competitive, increasing-cost industry in long-run equilibrium with identical firms. (a) Draw correctly labeled side-by-side graphs for the rose industry and a typical firm and show each of the following. (i) Industry equilibrium price and quantity, labeled Pm and Qm, respectively (ii) The firm’s equilibrium price and quantity, labeled Pf and Qf, respectively (b) Is Pm larger than, smaller than, or equal to Pf? (c) Assume that there is an increase in the demand for roses. On your graphs in part (a), show...
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