ECON 201

Solve and interpret standard models of consumer behavior

• Define and calculate marginal utility and the marginal rate of substitution (I)
• Derive factors that affect consumer demand and the elasticity of demand (I)
• Derive the demand curve of an individual consumer (I)
• Use algebra to model a consumer's options (I)
• Use calculus or marginal conditions to find a consumer's utility-maximizing choice (I)
• Use preference operators to model a consumer's preferences (I)
• Use utility functions to model a consumer's preferences (I)
• Distinguish between the substitution effects and income effects of a price change (I)
• Explain the role of preferences in consumer choices (D)
• Identify factors that affect consumer demand and the elasticity of demand (D)
• State and explain the Law of Demand (D)
• Define, calculate and interpret elasticities (D)

Solve and interpret standard models of producer behavior

• Define and calculate marginal product and marginal rate of transformation (I)
• Derive a competitive firm’s supply curve from its cost or production function (I)
• Derive factors that affect firm supply and the elasticity of supply (I)
• Distinguish between fixed and variable costs, and between long-run and short-run costs (I)
• Explain the cost-minimizing choice of inputs for a firm (I)
• Model the production technology of a firm (or other economic unit) using algebra (I)
• Model the production technology of a firm (or other economic unit) using graphs (I)
• Use calculus and/or marginal conditions to derive a competitive firm's profit maximizing output decision (I)
• Use calculus to derive the cost-minimizing choice of inputs for a firm (I)
• Compute and/or graph the cost function of a firm (D)
• Distinguish between decreasing marginal product and returns to scale (D)
• Explain the role of constraints and opportunity cost in firm choices (D)
• Identify factors that affect firm supply and the elasticity of supply (D)
• Link diminishing marginal product to the Law of Supply (D)
• State and explain the Law of Supply (D)

Solve and interpret standard models of market interaction

• Compute and interpret compensated variation and equivalent variation (I)
• Solve a simple (two-consumer, two-good) general equilibrium model (I)
• Distinguish between the short run and the long run (I)
• Explain the role of prices in the economy (D)
• Compute and interpret consumer surplus (D)
• Aggregate firm supply to market supply, in the short run and the long run (D)
• Aggregate individual demands to market demand (D)
• Explain the role of price taking behavior in competitive equilibrium (D)
• Graph and compute the equilibrium of a perfectly competitive market (D)
• Calculate and interpret the effect of a price floor or ceiling in a competitive market (D)
• Calculate and interpret the effect of an excise tax in a competitive market (D)
• Calculate and interpret the incidence of a tax (D)

Identify and analyze market failures, externalities and public goods

• State the definition of Pareto efficiency (I)
• Find Pareto efficient allocations (I)
• State and explain the first and second theorem of welfare economics (I)

Critically evaluate assumptions in economic/econometric models

• Apply the concept of revealed preferences (I)
• State the basic axioms of consumer theory (I)
• Understand determinants and meaning of a budget constraint (I)
• Distinguish long-run and short-run demand/supply curves, understand how they change systematically (I)
• State the essential features of a perfectly competitive market (D)
• Explain the role of assumptions in economic models (D)

Compare and critically evaluate economic arguments

• Use a model to evaluate the validity of an economic argument (I)
• Classify statements about the economy as normative or positive (D)
• Identify the key assumptions and empirical claims in an economic argument (D)

Formulate written economic arguments evaluating or supporting a position

• Write a brief paragraph (e.g., on an exam) that explains or applies economic concepts (D)

Present economic arguments by means of graphs, charts and tables

• Use graphs to depict a consumer's utility-maximizing choice (I)
• Use graphs to depict a competitive firm's profit-maximizing decision (I)
• Use graphs to depict a firm's cost-minimizing choice of inputs (I)
• Graph and explain the effect of changes to market conditions on equilibrium price and quantity (D)

Apply economics to everyday situations

• Analyze business decisions in a competitive environment (I)
• Analyze business decisions in a non-competitive environment (monopoly and oligopoly) (I)
• Analyze complex real-world events using the supply and demand model (I)
• Analyze the equilibrium effects of government interventions (taxes, subsidies, regulation) (I)
• Formally model the decision-making of participants in a real-world situation (I)
• Interpret a real-world situation using the concepts of scarcity, substitution, opportunity cost, and equilibrium (D)
• Describe the incentives facing participants in a real-world situation (D)
• Interpret simple real-world events using the supply and demand model (D)
• Predict the economy's response to changes in market conditions (D)

Use economics to evaluate specific policies

• Analyze the welfare effects of specific policies (I)

Evaluate current events using tools of economics

• Evaluate current events as they relate to the general course content (D)