May 19 - Final Zoom Meeting Review

Here's the link for today's Zoom Meeting.

Zoom Meeting

April 18 - Monday Zoom Meeting for Questions about Units 3 & 4

Today's Zoom Meeting is for you to ask your questions about Units 3 & 4.

There will be another Zoom Meeting tomorrow (Tuesday) for you to ask any questions about anything.

Monday Zoom Meeting

April 16 - Unit 4 Review Materials

There are two review videos for Unit 4: The Resource Market.  The first is a general review of all of Unit 4.  The second is a video going over the Substitution/Output/Net Effect.  I've also attached the power point about the S/O/N Effects that I am using in the video.

Unit 4 Review

Unit 4: Substitution/Output/Net Effects

Substitution/Output/Net Effect Power Point

Don't forget to go to the AP Website and at least look over (or better yet attempt to do) the old FRQs.  Here's the link for that:

AP Website Old FRQs

Also don't forget that there is a Zoom meeting on Monday for questions about Units 3 and 4.  There will also be another Zoom meeting on Tuesday for questions about any AP Micro stuff.  Both of these meetings will be at 10:00am.

However, if you have questions, you don't have to wait until then, feel free to email me right away.

AP Review - Unit 3

Here is the review video for Unit 3

Unit 3 Review

Remember there is a Zoom Meeting to ask questions about Unit 1 & 2 on Friday at 10:00am.

I will be posting the Unit 4 Video, either Friday night or on Saturday.

There will be a Zoom Meeting to ask questions about Unit 3&4 on Monday at 10:00 am.

There will be a final Zoom Meeting on Tuesday at 10:00 am to ask questions about anything.

Preparing For the Test

If you haven't already you need to make sure you are ready to go on test day.

Here's a link from the AP people about troubleshooting common Problems.

Troubleshooting common problems

AP Review - Day 2 - Unit 2

Here are the two videos for Unit 2.  I broke the Unit into parts.  The first half is everything up to elasticity.  The second video is Elasticity and Utility.

Again, we will have a Zoom meeting for questions about Unit 1 and Unit 2 on Friday at 10:00am.

I will also be posting the Unit 3 videos on Friday.  I will post the Unit 4 videos as soon as they are done, possibly on Friday, but no later than Saturday.

Unit 2 Part 1

Unit 2 Part 2

As I said earlier, I strongly recommend that you do a lot of practice FRQs, as well as studying all of the notes and worksheets and such.  Once again, here is the link to the AP Website catalog of old FRQ questions.

AP Micro Old FRQs

Message About AP Test

Here's a message from the AP folks about taking pictures on the AP Test

AP Review Day 1 - Unit 1

As a reminder of our schedule.  Today I am posting the videos for Unit 1 review.

Tomorrow/Thursday, I will post the Unit 2 videos.

On Friday we will have a Zoom meeting and you can ask questions about Unit 1 or 2.  Please watch the videos first, they will likely answer a lot of your questions.

Also on Friday I will post the Unit 3 video.

On Saturday I will post the Unit 4 video.  (If I get Unit 4 done sooner, I will post it on Friday too.)

On Monday of next week we will have a Zoom meeting about Unit 3 and Unit 4.  Again, please watch the videos first, then come with questions.

On Tuesday of next week we will have a Zoom meeting in which you can ask about anything.

All of the Zoom meetings will be at 10:00 am and will last as long as needed.

Here are the videos over Unit 1.

There two videos because there is a mistake in the first video.  The data I am using on a chart in the video is wrong, but I didn't notice until I started talking about it.  I also didn't want to refilm the whole thing.

Watch Video Part 1 until 28:30.  Then end it early.  I will be talking about the terms of trade between Australia and France.

Part 2 will pick up at the same place but with a chart that doesn't have issues.

Unit 1 Video Part 1 - (Stop video at 28:30)

Unit 1 Video Part 2

Occasionally when I play back the videos they look horrible (kind of overexposed and everything is white).  If that happens, just close the video completely and restart it and it will look fine.

May 12 - Last Regular Day/Begin of AP Review

The End of Regular Class:

Just a reminder that today is the last day to turn in anything or to make anything up.  You have until midnight tonight.  I have to finalize and submit your work early tomorrow so there is no extra time. 

Be sure to get all your work turned in by midnight!

The Beginning of Reviewings for the Test:

Tomorrow we will start reviewing for the AP test.  That means if you are not taking the AP test today is your last day.

Here is my current plan for reviewing for the AP test.   I will be posting a video that is a review of each Unit.  There will be one unit per day. 

We will also be holding Zoom meetings.  The point of the Zoom meetings will be for you to ask questions.  My hope is you will watch the review videos and then come to the related zoom meeting to ask questions about that material.  Currently my plan is to have the Zoom meeting for questions at 10:00am. 

Here is the schedule for videos and meetings.


Wednesday (5/13): Unit 1 Review Video Posted
Thursday (5/14): Unit 2 Review Video Posted
Friday (5/15): Unit 1 & 2 Zoom Meeting & Unit 3 Review Video Posted
Saturday (5/16): Unit 4 Review Video Posted
Sunday (5/17): Nothing Scheduled
Monday (5/18): Unit 3 & 4 Zoom Meeting
Tuesday (5/19): Final Zoom Meeting for any final questions
Wednesday (5/20): TEST DAY!   I'll be at my computer if you have questions you can email me.

I am in no way suggesting that these videos and Zoom meetings will be enough of a review.  In addition to studying your notes and classwork, I strongly suggest you go back and practice on old FRQs.

Here is a link to the web page with all of the old FRQs:

AP Micro FRQs

Doing these old FRQs will be a particularly useful way to study for two reasons.

1st - There is no Multiple Choice this year.  So you will only be doing FRQ questions.
2nd - They are not going to want to do something unusual for the questions this year.  They don't want there to be any unnecessary problems.  As such, I suspect the questions will be very standard and well known.  In other words, I suspect they will be very much like old questions.

May 11

The last assignments for AP Micro were posted last week.  You have today and tomorrow to finish up any missing work and assignments.  

All work, quizzes, test and everything must be turned in by midnight tomorrow (Tuesday 5/12).  After that the grade book will be closed and I will be submitting grades on Wednesday.

We will also be starting our review for the AP exam on Wednesday.  I'll post specifics on that tomorrow.

May 8 - Special Friday Post

Just found out that grades for Seniors have to be posted on Wednesday.  Thus, including today, we only have five more days left in which you can make up old work and complete new things.

We still have the last quiz to take.  So, I am going to post it today, so you can have the maximum amount of time to work on it and turn it in.

Here is the last quiz.

Unit 4 Quiz

We don't usually have a final, because we have the EOC.  But since we didn't have the EOC, I wanted to give a last opportunity to help your grade out.  Thus we will have one more opportunity to help your grade with a last test on USATestPrep.

Instead of a final we will have an "EOC Replacement".  If you wish to take it, go to USATestprep.com.  Go to the Econ EOC section and click the "Take a Test" button.  Take the 100% test.  This will be your final exam.  You only get 1 attempt at this and I will take the first grade you make.  (You don't get to change your answers and you don't get to try again.)  The first 100% test I see between now (Friday at 1:00) and Tuesday (At 11:59 PM) is the grade that will go in the gradebook (if it brings your grade up).

Except for the quiz above and this Replacement EOC, these are the last of the items to go into the gradebook.

We will use Monday and Tuesday of next week for you to finish up your work and turn things in.  If you have questions please email them to me.

Starting on Wednesday we will begin reviewing for the AP test.  There will be a separate post about that shortly.

Again, if you have any questions, please email me and ask.

Message from the AP People

Here's a letter that AP wanted us to pass on to the students.

AP Letter

May 7 - Factor Market Work and Zoom Meeting Link

Today we have one last set of worksheets to cover.

Problems Dealing With Factor Markets

With that we have finished the notes and work for AP Micro.

On Monday I will post a last quiz for the class.  Again it is a chart that has MRP and MCL on it, and it has a section for you to draw the different types of labor market graphs.

Zoom Meeting:  Sorry if you tried to join the Zoom meeting.  Something seems to be malfunctioning with Zoom.  I'm trying to figure out if it is me or them.  Email me if you have questions.

Lastly, if you are taking the AP Micro Test, please sign up for the AP Micro Test Review Remind, and pass the work to others so that they know to sign up as well.  Particularly people who had the class last semester.

You can join the remind by

1) Texting @faakf8 to the number 81010

or

2) There are alternate instructions on this link:

Joining the AP Micro Review Remind

We will start reviewing in one form or the other next week.

May 6 - More Labor Market Work

Here are some practice sheets you can work on for the Labor Market.

Labor Market Work

The link is actually two different sets of work (Activity 4-5 and Activity 4-6).  You can do both of them.

Remember we will have a zoom meeting tomorrow at 10:00.  I'll also have some more work tomorrow as well.

May 5 - Monopsony

Though we usually have work today and notes on Wednesday, it will work better if we finish the notes today and then have our work on Wed/Thu.

So without further ado, let's finish up the supply of labor.

We are looking at the different market structures.  There are three structures in the resource market.

Yesterday we looked at a Perfectly Competitive Supply of Labor (PCSL)

Today we are looking at the other two, but they both fall under one type of business: a monopsony.

A monopsony is the resource market equivalent of a monopoly.

A monopoly is when there is only one business selling a product in the product market.

A monopsony is when there is only one business hiring/buying in the resource market.

[Note again that a monopsony does NOT have to be linked to a monopoly.  You can have a monopsony in any of the four product markets.]

What is different about a PCSL and a monopsonist?

The key difference is that in a PCSL you can hire as many employees as you'd like at the current wage.  That is NOT true for the monopsonist.

If the monopsonist sets the wage at $X, they will get some number of people willing to work.  If they need to hire more than that, how can they get more people to show up?

The answer is that they must raise the wages.  If they increase the wage above $X, then more people will supply their labor.  Thus our supply line in a monopsony will not be horizontal.

The reason we ultimately have three types of resource markets is that there are two different types of monopsonies.  They are called a discriminating monopsonist and a non-discriminating monopsonist.

Let's start with the easier of the two, the discriminating monopsonist.   The discriminating monopsonist discriminates in that they treat their employees differently.  What this means is that when they want to hire more employees they have to raise the wage, but because they discriminate, they only off the new wage to the new employee.

Example:   You have five employees and pay each of them $15 an hour.  You need a sixth employee.  In order to get someone to come work for you, you have to offer a wage of $16 an hour  Because you are a discriminating monopsonist, you give the higher wage only to the new employee.

This leads us to talking about the Marginal Cost of Labor (MCL).  Remember MCL is the additional cost a business incurs by hiring one more employee.  How much more do you pay when you hire the next worker.

For the discriminating monopsonist, the MCL is their wage.  When our example business hires the sixth employee the cost of hiring them is $16. This leads us to have this graph for a Discriminating Monopsonist.

Note that once again the Supply line and the MCL line are together.  (Like Demand, Average Revenue, Marginal Revenue and Price are together on a MRDARP line.) 

We actually could label the line as SMCLW because the line is Supply line, the Marginal Cost of Labor line and the Wage line.

Again what this is showing is that when the business hires another worker, the cost of hiring that worker is their wage.  It costs $16 to hire the sixth worker.

Finally we have the non-discriminating monopsonist.  The non-discriminating monopsonist doesn't discriminate or choose between their employees.  What that means is that when they want to hire more employees they have to raise their wage, but because they don't discriminate, they raise the wage for all of their employees.

Example:   You have five employees and pay each of them $15 an hour.  You need a sixth employee.  In order to get someone to come work for you, you have to raise the wage to $16 an hour  Because you are a non-discriminating monopsonist, you raise the wage to $16 for ALL of your employees.  In other words, the new employee will get $16 an hour AND you will raise the wage for each of your first five employees buy a $1an hour.

This means the cost of hiring that sixth employee is greater than their wage.  Their wage is $16 an hour, but the cost of hiring them must also include the $1 an hour you are giving the first five employees.  Thus the MCL for the sixth employee is $16 + $1 + $1 + $1 + $1 + $1 = $21.

Their wage is $21.  The MCL for hiring them is $21.

The MCL is GREATER than the Wage and Supply.

This means in our graph the MCL will separate from the Wage and Supply lines.  This is akin to how the MR line separates from the DARP line in the product market.  However, unlike the MR and DARP lines, the MCL goes UP and is ABOVE the Supply line.

That means our graph supply of a non-discriminating monopsonist will look like this:

The MCL line is ABOVE the Supply line.  [Again, we could also label the Supply line as the Wage line.]

So, what happens when we add in our MRP line?  We get this:

This is where students often start going wrong, so let's be sure we see and understand what is going on.

How did we find how many people would be hired?  We used the golden rule of the resource market.  We want to buy/hire where MRP = MRC/MFC/MCL.  So we found where the MRP and MCL lines cross and went straight down from there to determine how much Labor to hire. 

That part is no different that all of our other graphs.  The change is that we determined the Wage (W) by looking at the SW line and NOT the MCL line.  We looked at the point where the amount of labor we want (L) is crossing the SW line and then went left from there to determine the Wage (W).



Some Warnings:
1) I want to warn you again against something I see every year.  We get to this point and suddenly students forget everything from earlier units and try to do what we've learned in the labor market to everything.  The MCL and S split is only in the resource market.  Do NOT apply it to the product market.

2) An equally prevalent and vexing error is that students will remember that a PCSL has a horizontal line, but then they will label that line MRDARP.  In the resource market for a PCSL it is the Supply line that is horizontal.  The demand line is a normal downward sloping demand line AND it isn't even labeled demand.  It is labeled MRP.

3) Remember that the 4 product markets and the 3 labor markets can combine in every different combination.  There is NO set link between any one of the four and one of the three.  In other words, you might sell your product in perfect competition and hire your labor in a monopsony.  In truth, lots of firms hire different jobs in different markets.

4) Though we looked at the discriminating monopsonist, the AP test usually only deals with a non-discriminating monopsonist.  So much so that they often just say Monopsonist and don't tell you which they mean.  If that happens you should assume that they mean a Non-discriminating Monopsonist.


Tomorrow we will have some work related to all of this.

Also, we are going to have one last quiz.  It will have a chart like we did at the start of unit 4 and it will ask you to draw the different graphs in the labor market.  We will likely do that on Monday of next week.

If you have questions there will be a zoom meeting on Thursday at 10:00

May 4

We have just one power point left.  It's on the supply side of the resource/labor market. 

We will cover some of it today and the rest on Wednesday.

Before we get started let's review:

1) Remember that in the labor market the roles of supply and demand flip.  So Demand in the labor market is the business demanding resources.

Supply in the market is households supplying resources.  So when we are talking about Supply of Labor we are talking about people going to work.

2) For some reason, after we do unit 4, students start trying to wedge it in to every other problem.  Unit 4 is only for the resource market.  Don't forget everything that has come before.

On to the supply of labor!

We confirmed last week that the Labor MARKET graph is just what we expected.  It is a standard market X.

We then learned that for an individual firm in the labor market Demand line is just a downward sloping line.  However, we don't actually call it a demand line, we label it as MRP or Marginal Revenue Product.

So, it doesn't matter what else is going on in the question, the way you draw the "demand" part of a labor graph is like this:

Now we move on to supply.

It turns out there are three different types of markets for the supply of labor.  This is kind of like how there are four market structures in the product market (Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly). 

HOWEVER, it should be noted that there is NO correlation between the market structures in the product market and the market structure in the labor market.  Any one of the 4 product markets can like to any one of the 3 labor markets.

Today we will handle the first of the three.  Then tomorrow we will handle the other two, which are related.

So today we have the Perfectly Competitive Supply of Labor (PCSL). 

A PCSL should stir up memories of Perfect Competition.  An individual firm in Perfect Competition in the PRODUCT market can produce as many of a product as it wants.  That makes its individual demand line perfectly elastic/horizontal.

An individual firm in a Perfectly Competitive Supply of Labor in the RESOURCE market can HIRE as many workers as it want.  It has a perfectly elastic/horizontal SUPPLY.  Only just like we labeled the Demand line differently and called it Marginal Revenue Product (MRP), we also label the supply line as the Marginal Cost of Labor (MCL) or Marginal Resource Cost (MRC) or Marginal Factor Cost (MFC).  (Note once again that we only use MCL if we are actually talking about labor.  If you are talking about a different resource, don't use MCL.  Use MRC or MFC instead.)

So instead of MRDARP (like in the Product Market) we have SMCL in the resource market for a PCSL.

So the graph of the MCL for an individual firm in a PCSL looks like this:

What does this mean?

It means a firm can hire as many workers as it wants at the current wage. 

What about that MCL line?

MCL is the Marginal Cost of Labor.  It means how much more cost do I incur when I add an additional unit of labor? 

Let's say the wage was $11 an hour.  If I hire another person how much more will it cost me?  It will cost $11 more an hour.  And if I hire another person after that?  $11 more an hour. 

In fact, that is true for every worker I hire.  The marginal cost of hiring another person is always $11.  It doesn't matter how many I hire.  I doesn't matter which worker it is.  The MCL is always $11.

NOTE that this is NOT true in the labor market as a whole.  The Supply line in the labor market is upward sloping.  (Scroll up 3 graphs.)  But for the individual firm, this is true.

This should again be bringing back memories of a MRDARP line.  Only MRDARP is DEMAND and the SMCL is SUPPLY.

Let's put our two lines together on one graph.  When we do, we get this:

Following our golden rule of econ, in the labor market we look for MRP = MCL (or MRC or MFC).

Where they cross we go down to find the quantity of labor we will hire. 

Because of our horizontal line we know that regardless of where the two lines cross the wage will be "W".

Our graph is also similar to the PRODUCT market in another way.  It is also similar in that we can draw a market graph and a firm graph side by side and show how the firms graph is determined by the market.  (As before we should put a dotted line between the two to show that one is controlled by the other.)

It looks like this:

Note how the X of the labor market determines the wage and how many workers will be hired in the entire market. 

Then the dotted line shows how the individual firm is a "WAGE TAKER".  That firm's MRP line show how many workers they should hire.

And remember, May the 4th be with you, always.