Review for the first Test

Chapter 1

Pay careful attention to the pitfalls of economic decision making, and the concept of marginal analysis

Chapter 2

Make sure you know the assumption behind the supply and demand curve.

Be able to find equilibrium

Know how to use supply and demand analysis to solve problems, including how to solve a tax

Chapter 3

Know how to draw and define budget constraints

Know how to draw and define indifference curves.

Be able to find the optimal point on a graph of these.

Be able to shift them.

Be able to solve problems and explain things using them.

Know how to calculate MRS, if given enough information.

Chapter 4

Define and Draw ICC

Define and Draw Engel Curves

Normal and inferior Goods

Be able to show the Income and substitution effects.

Define and Calculate Elasticity

Understand the shapes of the curves for different elasticities.

Chapter 5

Be able to use all of the information you learned in the last 4 chapters to solve problems

Chapter 6

Be able to calculate Expected Utility

Be able to calculate Expected Value

Be able to analyze problems using these concepts

Understand the shape of Utility curves for Risk Neutral, Risk Averse and Risk Neutral people