Microeconomics I

Convert between fractions, decimals, ratios, and percentages in economic calculations.

Calculate percentage changes in prices, quantities, income, and expenditure.

Substitute numerical values into an economic formula using the correct order of operations.

Solve one-step and two-step linear equations.

Rearrange a simple economic formula to isolate a required variable.

Translate a short economic statement into an algebraic expression or equation.

Solve a pair of simultaneous linear equations by substitution.

Check an algebraic solution and interpret its units in an economic context.

Plot ordered pairs accurately on a Cartesian coordinate plane using an appropriate scale.

Construct and interpret a graph of a single variable.

Construct a curve showing the relationship between two variables.

Calculate and interpret the slope and intercepts of a straight line.

Identify independent and dependent variables and express their relationship using function notation.

Evaluate a simple linear or nonlinear function at a specified input value.

Differentiate simple power and polynomial functions using the power rule.

Interpret a derivative as a slope and as a marginal economic quantity.

Explain scarcity by identifying the trade-offs in a simple choice.

Calculate the opportunity cost of a decision from the next-best alternative forgone.

Choose an action by comparing its marginal benefit with its marginal cost.

Predict how an individual may respond to a change in incentives.

Demonstrate gains from voluntary exchange using a simple numerical example.

Classify economic statements as positive or normative.

Distinguish correlation from a credible cause-and-effect claim in an economic example.

Identify an economic equilibrium and predict the direction of adjustment when the system is out of equilibrium.

Explain how prices and markets coordinate decentralized economic activity.

Explain the principal benefits of organizing exchange through markets.

Identify a market outcome that government intervention could potentially improve.

Explain how productivity determines an economy’s standard of living.

Explain how excessive growth in the quantity of money can produce inflation.

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

Calculate the arithmetic mean and range of a dataset.

Calculate and interpret quartiles and the interquartile range of a dataset.

Calculate the variance and standard deviation of a dataset.

Compare the dispersion of two datasets using an appropriate absolute or relative measure.

Construct a scatter plot for paired economic data.

Calculate and interpret Pearson’s correlation coefficient for paired data.

Estimate the equation of a simple linear regression line from a small dataset.

Interpret the slope and intercept of a regression equation and use it to make a prediction.

Distinguish cardinal utility from ordinal utility.

Calculate total utility and marginal utility from a consumption schedule.

Explain the relationship between total utility and marginal utility.

Apply the law of diminishing marginal utility to a consumption example.

Represent consumer tastes using a simple utility function.

Estimate the parameters of a simple one-good utility function from a utility schedule.

Calculate marginal utility from a differentiable utility function.

Apply the equi-marginal principle to allocate a fixed budget between two goods.

Rank consumption bundles using complete and transitive preferences.

Construct an indifference curve and an indifference map from consumer preferences.

Use the assumptions of consumer preference to explain why standard indifference curves slope downward and cannot intersect.

Relate convex indifference curves to a diminishing marginal rate of substitution.

Calculate and interpret the marginal rate of substitution between two goods.

Construct indifference curves for perfect substitutes.

Construct indifference curves for perfect complements.

Sketch and interpret indifference curves involving a neutral good or an economic bad.

Derive a consumer’s budget-constraint equation from income and prices.

Plot a budget line and calculate its intercepts and slope.

Classify consumption bundles as affordable, unaffordable, or exhausting the budget.

Show how an income change shifts the budget line.

Show how a price change rotates the budget line.

State the tangency condition for an interior consumer optimum.

Determine an interior consumer optimum using a budget line and indifference curves.

Identify a corner solution when the tangency condition does not determine the optimum.

Trace the effect of successive income changes on a consumer’s budget line and chosen bundle.

Construct an income-consumption curve from a set of consumer optima.

Use an income-consumption curve to distinguish normal goods from inferior goods.

Derive an Engel curve from an income-consumption curve.

Use the shape of an Engel curve to classify a good as a necessity, luxury, or inferior good.

Solve a diagram-based problem involving an income change and consumer choice.

Trace how a change in one good’s price alters the budget line and consumer optimum.

Construct a price-consumption curve from a set of consumer optima.

Derive an individual demand curve from a price-consumption curve.

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

Identify the substitution effect of a price change on an indifference-curve diagram.

Identify the income effect of a price change on an indifference-curve diagram.

Explain how substitution and income effects combine for normal, inferior, and Giffen goods.

Decompose a price effect into substitution and income effects on a consumer-choice diagram.

Explain how observed choices reveal a consumer’s preferences.

Identify directly and indirectly revealed preferences from observed choices.

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

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

Infer a preference ranking from budget and choice observations.

Compare the revealed-preference approach with the indifference-curve approach to consumer behaviour.

Construct a market demand schedule and curve by horizontally summing individual demands.

Calculate price elasticity of market demand using the percentage method.

Calculate point price elasticity at a specified point on a demand curve.

Calculate arc price elasticity between two points on a demand curve.

Classify and interpret price-elasticity values.

Relate price elasticity of demand to changes in total expenditure or total revenue.

Calculate and interpret income elasticity of demand to classify a commodity.

Calculate and interpret cross elasticity of demand to classify the relationship between two commodities.