AP Micro Unit 2 Review: Supply and Demand
AP Micro Unit 2 covers demand, supply, elasticity, market equilibrium, consumer and producer surplus, price controls, taxes, and the effects of trade policy. At 20–25% of the exam it is the highest-weighted micro unit alongside Unit 3, and its graphs appear inside almost every later unit.
What's in Unit 2
- 1Demand and the law of demand
- 2Supply and the law of supply
- 3Price elasticity of demand (and the total revenue test)
- 4Price elasticity of supply
- 5Income and cross-price elasticity
- 6Market equilibrium, consumer surplus, and producer surplus
- 7Market disequilibrium and changes in equilibrium
- 8Government intervention: price ceilings, price floors, and taxes
- 9International trade and public policy (tariffs and quotas)
Study this unit free on EconLearn
Market equilibrium, curve shifts, price controls, and economic shocks.
Full lesson, practice questions & flashcards →Price elasticity of demand, total revenue test, and cross-price elasticity.
Full lesson, practice questions & flashcards →What to master for the exam
- Master the double-shift rule: when both curves shift, either price or quantity is indeterminate.
- Use the midpoint formula for elasticity and connect elasticity to the total revenue test.
- Draw binding price ceilings (below equilibrium → shortage) and floors (above equilibrium → surplus) with the resulting deadweight loss.
- Show tax incidence: the more inelastic side of the market bears more of the tax.
AP Micro Unit 2: common questions
What is on AP Micro Unit 2?
Demand, supply, all the elasticities (price elasticity of demand and supply, income, cross-price), market equilibrium with consumer and producer surplus, price ceilings and floors, taxes and tax incidence, and basic trade policy. It is worth 20–25% of the AP Micro exam — tied for the largest share.
How do you remember what shifts demand vs supply?
Demand shifters are buyer-side: tastes, income (normal vs inferior goods), prices of related goods, expectations, and number of buyers. Supply shifters are seller-side: input costs, technology, taxes/subsidies, expectations, and number of sellers. A change in the good's own price never shifts its curve — that is a movement along it.