The AP Program offers two separate exams in economics: one in microeconomics and one in macroeconomics. Each exam is intended for qualified students who wish to complete studies in secondary school equivalent to a one-semester college introductory course. Each exam presumes at least one semester of college-level preparation. Students may take one or both exams in a given year. A separate score is reported for each.

The material included in the Course Descriptions and in the two exams has been selected by economists who serve as members of the AP Macroeconomics Development Committee and AP Microeconomics Development Committee. In establishing the courses and exams, the committees surveyed the economics departments of more than 200 institutions receiving the most AP scores in economics. Using the information obtained about the content of typical introductory college courses, the committees developed the course outlines and had the multiplechoice questions covering the outlines pretested on college students enrolled in the appropriate economics courses. The AP Course Descriptions and exams are thus representative of college courses and are, therefore, considered appropriate for the measurement of skills and knowledge in the fields of introductory microeconomics and macroeconomics. Inclusion of the content, ideas, and values expressed in the material is not intended as an endorsement of them by the College Board or ETS.

I. History and Approaches

Psychology has evolved markedly since its inception as a discipline in 1879. There have been significant changes in the theories that psychologists use to explain behavior and mental processes. In addition, the methodology of psychological research has expanded to include a diversity of approaches to data gathering.

AP students in psychology should be able to do the following:

• Recognize how philosophical and physiological perspectives shaped the development of psychological thought.

• Describe and compare different theoretical approaches in explaining behavior:

— structuralism, functionalism, and behaviorism in the early years;

— Gestalt, psychoanalytic/psychodynamic, and humanism emerging later;

— evolutionary, biological, cognitive, and biopsychosocial as more contemporary approaches.

• Recognize the strengths and limitations of applying theories to explain behavior.

• Distinguish the different domains of psychology (e.g., biological, clinical, cognitive, counseling, developmental, educational, experimental, human factors, industrial–organizational, personality, psychometric, social).

• Identify major historical figures in psychology (e.g., Mary Whiton Calkins, Charles Darwin, Dorothea Dix, Sigmund Freud, G. Stanley Hall, William James, Ivan Pavlov, Jean Piaget, Carl Rogers, B. F. Skinner, Margaret Floy Washburn, John B. Watson, Wilhelm Wundt).

II. Research Methods

Psychology is an empirical discipline. Psychologists develop knowledge by doing research. Research provides guidance for psychologists who develop theories to explain behavior and who apply theories to solve problems in behavior.

AP students in psychology should be able to do the following:

• Differentiate types of research (e.g., experiments, correlational studies, survey research, naturalistic observations, case studies) with regard to purpose, strengths, and weaknesses.

• Describe how research design drives the reasonable conclusions that can be drawn (e.g., experiments are useful for determining cause and effect; the use of experimental controls reduces alternative explanations).

• Identify independent, dependent, confounding, and control variables in experimental designs.

• Distinguish between random assignment of participants to conditions in experiments and random selection of participants, primarily in correlational studies and surveys.

• Predict the validity of behavioral explanations based on the quality of research design (e.g., confounding variables limit confidence in research conclusions).

• Distinguish the purposes of descriptive statistics and inferential statistics.

• Apply basic descriptive statistical concepts, including interpreting and constructing graphs and calculating simple descriptive statistics (e.g., measures of central tendency, standard deviation).

• Discuss the value of reliance on operational definitions and measurement in behavioral research.

• Identify how ethical issues inform and constrain research practices.

• Describe how ethical and legal guidelines (e.g., those provided by the American Psychological Association, federal regulations, local institutional review boards) protect research participants and promote sound ethical practice.

III. Factor M arkets

In this section of the course, students also apply the concepts of supply and demand to markets for factors such as labor, capital, and land. Students analyze the concept of derived demand, understand how a factor’s marginal product and the marginal revenue product affect the demand for the factor, and consider the role of factor prices in the allocation of scarce resources. When the markets for different factors are considered separately, most attention should be given to the labor market, particularly labor supply and wage and employment determination. Although the course may emphasize perfectly competitive labor markets, the effect of deviations from perfect competition, such as minimum wages, unions, monopsonies, and product market monopolies, can also be considered. The principles studied in the analysis of the labor market should be applied to the markets for land and capital to explain the determination of economic rent and the price of capital. By studying the determination of factor prices, students gain an understanding of how the market determines the distribution of income and the sources of income inequality in a market economy.

IV. M arket Failure and the R ole of Government

It is important for students to understand the arguments for and against government intervention in an otherwise competitive market. Students examine the conditions for allocative efficiency, using the marginal social benefit and marginal social cost principle, and the ways in which externalities, public goods, and the market distribution of income create market failures even in competitive free-market economies. In addition, students are expected to study the effectiveness of government policies such as subsidies, taxes, quantity controls, and public provision of goods and services, which are designed to correct market failures and achieve allocative efficiency. It is also important both to emphasize that monopolies can cause market failures when they use their market power to engage in behavior that restrains competition and to examine the government’s attempt to solve such problems by using antitrust policy and regulations. Although there is not a generally accepted standard for judging the equity of an economy’s income distribution, a well-designed course will incorporate key measures of income distribution (Lorenz curve and Gini coefficient) and examine the impact of government tax policies and transfer programs, both on the distribution of income and on allocative efficiency.