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AP Microeconomics Flashcards: Types Of Profit

Study Types Of Profit in AP Microeconomics with focused flashcards that help you recognize the idea, recall the key rule, and apply it in practice-style prompts.

QUESTION

How does positive economic profit affect industry supply?

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ANSWER

Increases industry supply. New entrants increase production as they seek above-normal returns.

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AP Microeconomics: Production, Cost, and Perfect Competition Model

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What this deck covers

This deck focuses on Types Of Profit, giving you a quick way to review the definitions, rules, and examples that matter most for AP Microeconomics.

How to use these flashcards

Work through these flashcards in short sessions. Try to answer each prompt before flipping the card, then revisit any cards you miss until the explanation feels automatic.

Practice questions

1 of 43Practice questions for this set
Based on the firm's cost and revenue information, is the firm earning normal profit? A home cleaning service earns total revenue of $75,000. Its explicit costs are $40,000 for supplies and hired help and $15,000 for advertising and insurance, for total explicit costs of $55,000. The owner gives up $18,000 in wages from another job and uses a vehicle that could be leased out for $2,000 per year (implicit costs total $20,000).
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