This lesson covers Topics 3.1-3.2 in the AP Syllabus. Today we will start our study of the theory of the firm. We will learn about the costs of production for firms in the short-run. This problem set (optional) may help you too.
Learning Target
Analyze the ways in which incentives influence what is produced and distributed in a market system.
Evaluate the extent to which competition among sellers and among buyers exists in specific markets.
Describe the consequences of competition in specific markets.
Criteria for Success
I will be able to use ideas related to firm theory to analyze economic problems.
I will be able to demonstrate this understanding using a graph of the aforementioned model.
Assignments
Read Krugman (Modules 52-55) and watch the following videos.
Watch: The video lecture for today's topic (linked above).
Optional: The videos linked below.
Khan Academy videos (not required)
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Formative Assessment (MCQ's): You will take a formal assessment during class. The assessment will consist of multiple-choice questions and one FRQ from an old AP Exam. Doing the problem of the day and ensuring that you understand it will help you prepare for today's formative assessment and help to ensure that you understand the concepts in this lesson.
Problem of the Day: Use a diagram and words to explain the factors that determine the shape of a firm's marginal and average total cost curves, while explaining the relationship in the short-run between them.