AP®︎ Microeconomics Unit 6: Notes & Study Guide
Prepare for your quiz, test, or the AP exam with a comprehensive review on Unit 6 of AP Microeconomics – Market Failure and the Role of Government.
Unit 6: Market Failure and the Role of Government
This unit explores the effects of government policies on market outcomes, such as taxes, subsidies, externalities, and income redistribution.
Begin with Topic 6.1: Socially Efficient and In...To review Unit 6, go through each of the 5 topics below.
Everything you actually need to know for your Unit 6 test, pulled directly from the AP® Microeconomics curriculum.
Socially Efficient and Inefficient Market Outcomes
Socially Efficient and Inefficient Market Outcomes
- Social Efficiency and the Optimal Quantity
- Why Perfect Competition Is Socially Efficient
- Why Markets Become Socially Inefficient
Externalities
Externalities
- What Externalities Are
- Negative Externalities and Overproduction
- Positive Externalities and Underproduction
Public and Private Goods
Public and Private Goods
- Rivalry and Excludability
- The Four Types of Goods
- The Free Rider Problem
The Effects of Government Intervention in Different Market Structures
The Effects of Government Intervention in Different Market Structures
- Per-Unit Taxes and Subsidies in Competitive and Imperfect Markets
- Lump-Sum Taxes and Subsidies
- Price Controls in Different Market Structures
Inequality
Inequality
- Income Inequality vs Wealth Inequality
- The Lorenz Curve and Gini Coefficient
- Why Markets Generate Inequality
Notes
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