Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit

ECON 201: Microeconomic Theory

Exam #1 Study Guide

Readings:

.    You are responsible for having read (and understood) the material in chapters 1, 2, 3, 4, 5, and 6.

Lectures:

.    You are responsible for the materials we have covered in class.

.    All lecture slides are available on Blackboard.

Written Homeworks:

.    You are responsible for the material covered (and the questions) in the problem sets to date.

o Solution keys are posted on Blackboard.

Key Terms:

.    You should be sure to know the definitions of key terms/concepts in the textbook and lecture slides.

o These are in bold typeface in the chapters of the textbook.

o These are also often defined and in bold in the lecture slides (or highlighted in a blue box with a heading for the term/concept) available on Blackboard.

Analysis:

.    You should know the models and ideas we have seen in class, for example:

o Budget constraint and choice set;

o Preferences (including diagraming preferences using indifference maps);

o The consumer’s optimal choice under different types of preferences.

.    You should be able to reproduce (draw) the relevant diagrams for these models and use the diagrams to answer questions, for example:

o Diagram the consumer’s budget constraint and choice set, how do these change if prices and/or income change?

o What is the slope of the budget constraint?

o Diagram consumer preferences for a Cobb-Douglas utility function (i.e. the indifference curves). What does the slope at any point on an indifference curve tell us?

o Using Cobb-Douglas preferences, show preferences that violate transitivity. Show how Cobb-Douglas preferences satisfy monotonicity and convexity.

o Diagram the consumer’s optimal choice for perfect substitutes and perfect complements.

o Diagram income offer curves using the consumer’s optimal choice for Cobb-Douglas preferences, perfect substitutes, perfect complements, and quasilinear preferences.

o Diagram Engel curves for Cobb-Douglas preferences, perfect substitutes, perfect complements, and quasilinear preferences.

o Diagram price offer curves using the consumer’s optimal choice for Cobb-Douglas preferences, perfect substitutes, and perfect complements.

o Diagram demand curves for Cobb-Douglas preferences, perfect substitutes, and perfect complements.