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College Board, Advanced Placement, AP, AP Central, and the acorn logo are registered trademarks [of College Board. Visit College Board on the web: collegeboard.org](of College Board. Visit College Board on the web: collegeboard.org).  \nAP Central is the official online home for [the AP Program: apcentral.collegeboard.org](the AP Program: apcentral.collegeboard.org).  \nMICROECONOMICS  \nSECTION II  \nTIME – 1 HOUR  \nDirections:  \nSection II has 3 questions and lasts 1 hour.  \nYou may use the available paper for scratch work and planning, but you must write your answers in the free-response booklet. Label parts (e.g., A, B, C) and sub-parts (e.g., i, ii, iii) as needed. Use a pencil or a pen with black or dark blue ink to write your responses.  \nInclude correctly labeled graphs, if useful or required, in explaining your answers. A correctly labeled graph must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to “Calculate,” you must show how you arrived at your final answer. A calculator is allowed in this section. You may use a handheld calculator that is approved for this exam or the calculator available in this application.  \nYou may pace yourself as you answer the questions in this section, or you may use these optional timing recommendations:  \nIt is suggested that you spend the first 10 minutes reading all of the questions and planning your answers. Then, it is suggested that you spend about 25 minutes on question 1 and about 12 minutes each on questions 2 and 3.  \nYou can go back and forth between questions in this section until time expires. The clock will turn red when 5 minutes remain—the proctor will not give you any time updates or warnings.  \nNote: This exam was originally administered digitally. It is presented here in a format optimized for teacher and student use in the classroom.  \n© 2025 College Board.  \n[Visit College Board on the web:](Visit College Board on the web: collegeboard.org 2)[ collegeboard.org](Visit College Board on the web: collegeboard.org 2)[ 2](Visit College Board on the web: collegeboard.org 2)  \nAP MICROECONOMICS 2025 n FREE-RESPONSE QUESTIONS  \n1. Voda Reservoir is a profit-maximizing firm and the only producer of bottled water in a country. Currently, Voda Reservoir is earning negative economic profit.  \nA. Draw a correctly labeled graph for Voda Reservoir and show each of the following.  \ni. The profit-maximizing quantity, labeled QM  \nii. The profit-maximizing price, labeled PM  \niii. The average total cost curve consistent with Voda Reservoir earning negative economic profit, labeled ATC  \niv. The area of deadweight loss, shaded completely  \nB. Suppose the government requires Voda Reservoir to produce the socially optimal quantity of bottled water. On your graph in part A, show the socially optimal quantity of bottled water, labeled QS .  \nC. Suppose instead the government grants a per-unit subsidy to Voda Reservoir. What will happen to Voda Reservoir’s profit-maximizing quantity of bottled water? Explain.  \nD. Suppose new producers have entered the bottled-water market and Voda Reservoir  \ncontinues to operate in the bottled-water market. Will the demand for Voda Reservoir’s bottled water become more elastic, become less elastic, or stay the same as new producers enter the market?  \nE. Voda Reservoir hires workers in a perfectly competitive labor market.  \ni. If the demand for bottled water increases, what will happen to Voda Reservoir’s demand for labor? Explain.  \nii. The government implements a new regulation that increases the minimum age required for a worker to be employed in a bottled-water factory. What will happen to the market wage in the short run? Explain.  \n© 2025 College Board.  \n[Visit College Board on the web:](Visit College Board on the web: collegeboard.org 3)[ collegeboard.org](Visit College Board on the web: collegeboard.org 3)[ 3](Visi","cbCaiu2P6bPiCAtV","https://ap.wps.com/l/cbCaiu2P6bPiCAtV","pdf",230646,"English","# Section II\n## Instructions\n## Question 1\n## Question 2\n## Question 3","[{\"question\":\"How long is Section II and how many questions does it include?\",\"answer\":\"Section II lasts 1 hour and includes 3 questions.\"},{\"question\":\"What graphing requirements must be met in the free-response answers?\",\"answer\":\"Graphs must be correctly labeled, with all axes and curves clearly labeled, and must show directional changes. Include labeled quantities as the questions specify.\"},{\"question\":\"What does the exam require if a question asks to calculate?\",\"answer\":\"When a question prompts you to “Calculate,” you must show how you arrived at your final answer.\"}]","AP® Microeconomics Free-Response Questions Set 1 | PDF",1790750688,13]