CLEP Principles of Microeconomics study plan

Define opportunity cost, scarcity, and marginal analysis, then apply marginal reasoning to three everyday decisions in writing.

Derive a linear demand equation from two price-quantity pairs and compute slope and intercept without notes.

Classify five real-world examples as shifts of the demand curve versus movements along it, and justify each classification.

Construct a supply-and-demand diagram by hand showing equilibrium, a binding price ceiling, and a binding price floor, labeling the resulting shortage or surplus.

Compute price elasticity of demand using both the midpoint formula and total-revenue logic, and state which method you used.

Predict how a given elasticity magnitude changes the revenue effect of a price increase, for elastic, unit-elastic, and inelastic cases.

Distinguish income elasticity and cross-price elasticity, and infer good type (normal, inferior, substitute, complement) from the sign of each coefficient.

Compute consumer surplus and producer surplus from a linear supply-and-demand graph and identify the deadweight loss from a tax.

Explain diminishing marginal utility and derive why a downward-sloping demand curve follows from utility maximization subject to a budget constraint.

Compute total, average, and marginal product from a short-run production table and identify the range of diminishing marginal returns.

Derive marginal cost from total cost and sketch the relationships among MC, ATC, and AVC curves.

Distinguish accounting profit from economic profit and compute both for a single firm example.

State the profit-maximizing rule MR = MC and apply it to find quantity and price for a price-taking firm.

Determine shut-down versus continue-operating decisions using the P versus AVC comparison in both short-run and long-run frames.

Trace long-run adjustment in a perfectly competitive market from short-run profit to entry, price change, and restored zero economic profit.

Draw side-by-side market and single-firm diagrams showing long-run equilibrium at minimum ATC.

Contrast the demand curve facing a monopolist with that facing a competitive firm and explain why P exceeds MR for a monopolist.

Compute monopoly output, price, profit, and deadweight loss from a linear demand and constant marginal cost.

Explain how price discrimination raises profit and state the conditions required for it to work.

Compare monopolistic competition and oligopoly outcomes, including excess capacity and strategic interdependence, and identify the prisoner's dilemma payoff structure.

Compute absolute and comparative advantage from an output or input table and identify the mutually beneficial terms of trade.

Draw and interpret a production possibilities frontier, distinguishing points inside, on, and outside the curve and relating the slope to opportunity cost.

Derive a firm's marginal revenue product and determine the profit-maximizing quantity of labor hired at a given wage.

Explain how a monopsonist restricts hiring relative to a competitive labor market and identify the resulting wage gap.

Classify four externality scenarios as positive or negative and as production or consumption, and show the welfare loss on a graph.

Compare Pigouvian taxes, subsidies, tradable permits, and direct regulation on efficiency, revenue, and administrative cost.

Explain why public goods are underprovided by private markets using non-rivalry and non-excludability, and distinguish public goods from common resources.

Interpret a Lorenz curve and Gini coefficient, and evaluate the efficiency-versus-equity tradeoff of a redistributive policy.

Take two full-length timed practice exams under exam conditions and record per-domain accuracy.

Re-teach your three weakest concepts aloud in under five minutes each, using your own examples and graphs.

Build a one-page formula and graph-recognition sheet covering elasticity, costs, MRP, and welfare triangles, and reconstruct it from memory.

Eliminate recurring error patterns by rewriting each missed question into a rule statement you can apply to a new problem.