First Exam

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Principles of Microeconomics First Exam: February 8th 
 

Chapters: 4, 5, 7, 8, 10, and 11

Ideas on the Exam (a good list, but not an exhaustive list; you are responsible for all material from the text and lectures even if t's not listed here)

Supply and Demand

  1. The Law of Demand
  2. Demand Determinants
  3. Shifts vs. slides on a demand curve
  4. The Law of Supply
  5. Supply determinants
  6. Shifts vs. slides on a supply curve
  7. Market equilibrium
  8. Surplus and shortage

Elasticity

  1. Definition of price elasticity of demand
  2. Definition of price elasticity f supply
  3. Definition of cross-price elasticity of demand
  4. Definition of income elasticity of demand
  5. elastic, inelastic, unitary elasticity
  6. The relationship between price elasticity of demand and Total revenue

Effects of Taxation

  1. Consumer Surplus
  2. Producer Surplus
  3. The burden of taxation
  4. deadweight loss and welfare loss triangle 
  5. Price floors
  6. Price ceilings

Utility Theory

  1. Total utility and marginal utility
  2. The Principle of Rational Choice (MUx/Px = MUy/Py)

Game Theory 

  1. The Prisoners' Dilemma 
  2. Dominant strategies
  3. Nash equilibrium 
  4. Cooperative vs. non-cooperative games
  5. Sequential vs. simultaneous move games 

Problems you should be able to work

  1. Shifting demand and supply curves
  2. Determining market equilibrium, and/or amounts of surplus or shortage
  3. Calculating elasticities and interpreting the results 
  4. Showing relatively elastic and inelastic demand and supply curves
  5. Calculate the burden of a tax
  6. Calculate the optimal combination of two goods consumed using the Principle of Rational Choice
  7. Use payoff matrices in a game theory example