The Principles of Microeconomics CLEP is the equivalent of a one-semester introductory microeconomics course. Macroeconomics looks at a whole economy. This exam looks at one buyer and one firm at a time: why a price lands where it does, how a household decides what to buy, what it costs a firm to make one more unit, how much that firm produces and what it charges, how wages get set, and what government does when a market gets the answer wrong. It is NOT a vocabulary test. Graphs show up all over this exam. You get a supply and demand graph or a set of cost curves, and you have to say what happens when something changes. College Board splits the exam into 4 content areas, and one of them, Product Markets, is 55% to 70% of the test. That is big enough that the table below breaks it into its 4 parts, which is why you see 7 rows.
| Category | Share of exam | What is in it |
|---|---|---|
| Product Markets: Firm Behavior and Market Structure | 23% to 33% | Perfect competition, monopoly, monopolistic competition, oligopoly, and the price and output decision in each one |
| Product Markets: Supply and Demand | 15% to 20% | Supply and demand curves, what shifts them, elasticity, consumer and producer surplus |
| Basic Economic Concepts | 10% to 16% | Scarcity, opportunity cost, the production possibilities curve, comparative advantage, specialization and trade, marginal analysis |
| Product Markets: Production and Costs | 10% to 15% | Short-run and long-run costs, marginal cost, average costs |
| Market Failure and the Role of Government | 8% to 14% | Externalities (positive and negative), goods the market will not supply on its own, antitrust policy, income distribution and equity, effects of government intervention |
| Factor Markets | 6% to 12% | Labor demand and supply, the hiring decision, wage determination, income distribution, other factor markets |
| Product Markets: Theory of Consumer Choice | 5% to 10% | Utility maximization, budget constraints, substitution and income effects |
| Questions | About 80 multiple choice |
| Time | 90 minutes |
| Passing score | 50 (some schools require 60) |
| College credits | 3 semester hours (typical) |
| Exam fee | $97 |
| Retake wait after a fail | 90 days |
How do our free questions compare to the real exam?
By the count, close. Product Markets is 13 of our 20 free questions, which is 65%, and the real exam is 55% to 70%. The trouble is inside the categories, and you should know where the holes are before you read anything into your score. Here is the count for our 20 free questions (10 here, 10 more by email) against the real weights.
| Category | Share of real exam | Our 20 free questions |
|---|---|---|
| Product Markets: Firm Behavior and Market Structure | 23% to 33% | 6 of 20 |
| Product Markets: Supply and Demand | 15% to 20% | 4 of 20 |
| Basic Economic Concepts | 10% to 16% | 5 of 20 |
| Product Markets: Production and Costs | 10% to 15% | 2 of 20 |
| Market Failure and the Role of Government | 8% to 14% | 1 of 20 |
| Factor Markets | 6% to 12% | 1 of 20 |
| Product Markets: Theory of Consumer Choice | 5% to 10% | 1 of 20 |
TIP: Start with firm behavior and market structure, the largest piece of the test at 23% to 33%, or about 18 to 26 of the 80 questions. We give you 6 questions on it, and every one of them is about perfect competition or monopoly. There is NOTHING on oligopoly, monopolistic competition, or game theory. Factor Markets gets 1 of our 20 questions and it is 6% to 12% of the real exam, which is about 5 to 10 questions. Market Failure and the Role of Government also gets 1, against 8% to 14% (about 6 to 11 questions), and that one question only looks at externalities from the positive side. We have nothing on pollution and the other negative externalities, nothing on antitrust, and nothing on income distribution. Basic Economic Concepts runs the other way. It is 5 of our 20, which is 25%, against 10% to 16% of the real exam, and even with 5 questions there is not one on comparative advantage. One more gap, and it is the big one. None of our free questions makes you read a graph. One question on this page has a small table, and 5 of the 20 answer explanations include a picture, but the real exam hands you a supply and demand graph or a set of cost curves first and asks what changes. A good score here tells you the terms are in decent shape. It does not tell you whether you can read a cost-curve graph cold.
Where should I spend my time studying?
Five things, based on the College Board weights and what we tell every student on our study guide page:
- Start with market structures. Firm behavior and market structure is the largest piece of the exam at 23% to 33%, which is about 18 to 26 of the 80 questions, and it is where most students struggle. There are four structures: perfect competition, monopolistic competition, oligopoly, and monopoly. Know what each one predicts about price, output, and profit, NOT just the names. Our free questions only cover two of the four.
- Learn the firm's cost curves well enough to draw them from memory. Marginal cost, average total cost, and average variable cost show up all over this exam, usually with a price line or a demand curve drawn across them. For each graph, pick an output level and say out loud whether the firm is making a profit, taking a loss, or better off shutting down. If you cannot do that, you do not know the graph yet.
- Work the supply and demand graph until it is automatic. Supply and demand is 15% to 20% of the exam, which is 12 to 16 questions. Shift one curve and say what happens to price and quantity. Then find consumer surplus and producer surplus on the same picture. The questions here ask what changes, and a definition will not get you there.
- Do not skip the two small areas. Factor Markets and Market Failure and the Role of Government are 14% to 26% of the exam between them, or about 11 to 21 questions, and our free questions give you 2 on them in total. Know how a firm decides how many workers to hire, what a negative externality does to the market outcome, and how a tax or a subsidy is supposed to fix it.
- Practice comparative advantage with numbers. It sits in Basic Economic Concepts and none of our free questions touch it. Take two countries and two goods, work out who gives up less to make each one, and do it a few times. It is manageable once you have done it by hand.
For the full topic breakdown and pass-rate history, see the Principles of Microeconomics CLEP study guide page.