Microeconomics I

Explain how prices coordinate economic activity in a market.

Explain one benefit of organizing economic activity through markets.

Identify a market outcome that may justify government intervention.

Explain how a government policy can improve a market outcome in a simple case.

Explain the link between productivity and the standard of living.

Explain how sustained growth in the quantity of money can cause inflation.

Describe the short-run trade-off between inflation and unemployment.

Classify an economic statement as positive or normative.

Interpret a graph that displays observations of a single variable.

Plot an economic relationship between two variables on coordinate axes.

Distinguish a movement along a curve from a shift of the curve.

Calculate the slope of a straight line from two points.

Interpret the economic meaning of a curve's slope.

Identify a positive or negative relationship between two variables from a graph.

Distinguish evidence of association from evidence of cause and effect.

Express a simple economic relationship using function notation.

Evaluate a simple economic function at a specified input value.

Rearrange a linear economic equation to isolate a chosen variable.

Calculate the derivative of a simple polynomial function.

Interpret a derivative as a marginal economic quantity.

Solve a pair of linear equations for an equilibrium value.

Locate equilibrium as the intersection of two curves on a graph.

Calculate the range of a dataset.

Calculate the variance of a small dataset.

Calculate and interpret the standard deviation of a small dataset.

Calculate a correlation coefficient from a small dataset.

Interpret the sign and magnitude of a correlation coefficient.

Estimate a simple linear regression equation from supplied summary information.

Interpret the slope coefficient of a simple linear regression.

Distinguish total utility from marginal utility.

Calculate marginal utility from a total-utility schedule.

Illustrate the law of diminishing marginal utility using a utility schedule.

Distinguish cardinal utility from ordinal utility.

Determine cardinal consumer equilibrium using the marginal-utility-per-rupee rule.

Rank consumption bundles using ordinal preferences.

Specify a simple utility function that represents stated preferences.

Estimate the parameters of a simple utility function from supplied consumer data.

Construct an indifference curve from information about equally preferred bundles.

Determine which of two bundles is preferred using an indifference map.

Explain why a standard indifference curve slopes downward.

Explain why higher indifference curves represent higher utility.

Explain why standard indifference curves cannot intersect.

Relate convex indifference curves to diminishing marginal rate of substitution.

Calculate the marginal rate of substitution at a point.

Recognize indifference-curve shapes for perfect substitutes and perfect complements.

Write a consumer's budget constraint from income and prices.

Calculate the intercepts of a budget line.

Calculate the slope of a budget line.

Draw the effect of an income change on the budget line.

Draw the effect of a price change on the budget line.

Identify an interior consumer optimum using the tangency condition.

Identify a corner consumer optimum from preferences and the budget constraint.

Solve a simple utility-maximization problem subject to a budget constraint.

Construct an income consumption curve from a sequence of consumer optima.

Use an income consumption curve to classify a good as normal or inferior.

Derive an Engel curve from income and quantity data.

Interpret the slope and shape of an Engel curve.

Calculate the change in quantity demanded resulting from a stated change in income.

Construct a price consumption curve from a sequence of consumer optima.

Derive an individual's demand curve from a price consumption curve.

Identify the total price effect of a price change on quantity demanded.

Distinguish the substitution effect from the income effect.

Determine the directions of the substitution and income effects for a normal good.

Determine the directions of the substitution and income effects for an inferior good.

Explain how the income effect can produce Giffen-good behaviour.

Decompose a price effect into substitution and income effects on an indifference-curve diagram.

Explain how observed choices reveal a consumer's preferences.

Apply the Weak Axiom of Revealed Preference to two observed choices.

Test a small set of consumer choices for consistency with revealed preference.

Infer preference rankings from price, income, and choice data.

Construct a market demand schedule by horizontally summing individual demands.

Construct a market demand curve from individual demand curves.

Distinguish a movement along market demand from a shift in market demand.

Calculate point price elasticity of demand.

Calculate arc price elasticity of demand.

Classify demand as elastic, inelastic, or unit elastic from an elasticity value.

Predict the effect of a price change on total expenditure using price elasticity.

Calculate income elasticity of demand.

Classify a good using the sign and magnitude of its income elasticity.

Calculate cross elasticity of demand and classify the relationship between two goods.

Structure an exam answer using a definition, economic reasoning, a labelled diagram or calculation, and a conclusion.