ECON 201: Microeconomic Theory Exam #1
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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.
2024-03-04