AP®︎ Microeconomics: Topic 1.6 Practice Test
Prepare for your quiz, test, or the AP exam with focused practice questions on Topic 1.6 of AP Microeconomics – Marginal Analysis and Consumer Choice.
Questions List
Topic 1.6
Question 1 Easy
This question tests the following: CBA-2.B
What does marginal analysis help consumers do?
What You’re Being Tested On:
Explore the learning objectives taken directly from the College Board’s AP® Microeconomics Curriculum. Ensure you’re prepared for the exact topics covered on the AP® exam, in-class tests, and quizzes, and gain confidence in your mastery of the material.
Topic 1.6: Marginal Analysis and Consumer Choice
Learning Objective: CBA-2.B
a. Define marginal analysis and related terms. b. Explain a decision using marginal analysis (using a table or a graph when appropriate).
Essential Knowledge: CBA-2.B.1
Marginal analysis involves comparing the additional benefit of increasing a given activity with the additional cost. Comparing marginal benefit (MB) with marginal cost (MC) helps individuals (firms) decide whether to increase, decrease, or maintain their consumption (production) levels.
Essential Knowledge: CBA-2.B.2
The optimal quantity at any point in time does not depend on fixed costs (sunk costs) or fixed benefits that have already been determined by past choices.
Essential Knowledge: CBA-2.B.3
The optimal quantity is achieved when marginal benefit is equal to marginal cost or where total benefit is maximized.
Learning Objective: CBA-2.A
a. Define the key assumptions of consumer choice theory. b. Explain (using a table or graph as appropriate) how a rational consumer’s decision making involves the use of marginal benefits and marginal costs. c. Calculate (using a table or a graph when appropriate) how a rational consumer’s decision making involves the use of marginal benefits and marginal costs.
Essential Knowledge: CBA-2.A.1
Consumers face constraints and have to make optimal decisions accounting for these constraints.
Essential Knowledge: CBA-2.A.2
In a model of rational consumer choice, consumers are assumed to make choices so as to maximize their total utility.
Essential Knowledge: CBA-2.A.3
Consumers experience diminishing marginal utility in the consumption of goods and services.
Essential Knowledge: CBA-2.A.4
Consumers allocate their limited income to purchase the combination of goods that maximizes their utility by equating/comparing the marginal utility of the last dollar spent on each good. Exclusion: Indifference curves are beyond the scope of the course and the AP Exam, but equating the ratios of marginal utility to price is within the scope.
