Outline Of Topics for Exam I
 Managerial Economics
 Economics is?
 Scarce and Alternatives
 Resource Allocation Process
 Objectives of the Firm
 Wealth Maximization
 Agency Problems of Modern Corporations
 Marginalism
 Classical Optimization (Unconstrained)
 Second Order Conditions
 Constrained Optimization
 Two types of techniques
 Optimization Techniques
 Huristics
 Programming Solutions
 Economic Decisions and Uncertainty
 Risk Aversion
 Corporate Vs. Individuals
 Risk and Return
 Expected Utility
 Expected Value
 Why Insurance?
 Demand and Supply
 Theory of Demand
 Demand Schedule (in various forms)
 Total Revenue
 Where do Demand Curves Come From?
 Indifference Curves
 The Budget Constraint
 Consumer Choice
 Consumer Equilibrium
 The Effect of Price Changes
 Income and Substitution Effects
 The Demand Curve
 Shifting Demand Curves
 Other factors
 Shifts are Caused by?
 Market Demand Curve
 Elasticity
 Ways to Measure Price Elasticity
 Continuous Case
 ARC Elasticity
 Point Elasticity
 Total Revenue & Elasticity
 Elasticity and Marginal Revenue
 Market and Firm Demand Elasticity
 Income Elasticity
 Engel's Curves
 Cross Elasticity
 Other Elasticities
 Regression Analysis
 Uses for Simple Regression
 Assumptions of Regression Analysis
 Estimating the Regression Coefficients
 Regression Features of Spreadsheets
 Uses for Regression Equations
 Expectations for Model Results
 Does everything look Ok?
 Correlation Analysis
 Partitioning the Variance
 Analysis of Variance
 Calculating Correlation Values
 The TTest
 The FTest
 Using Spreadsheet Output
 Interpreting The Output
 Multiple Regression
 Difficulty with RegressionData Patterns
 Autocorrelation
 Difficulty with Regression  Model Design
 Specification Problems
 Multicollinearity Problems
 Simultaneous Observations
 Non Linear Relationships
 Transforming Data
 Try a transformed plot
 Converting the Equation:
 Advantages and Disadvantages of Multiplicative
 Forms of Estimating the Demand Curve
A good use for this outline is to look at the topics and see what you can say about them. For example: Can you define the terms? Can you
describe how the concept is used? Can you think of an application? Can you find a problem in the appropriate chapter and solve it without help? Can you come up with a good question relating to the topic? Can you
explain the idea and its use to someone else?
In studying for the exam try to avoid memorization. If your memory is like mine you will forget just at the time you need it mostduring
an exam. Instead try to understand the process, rather than trying to remember the result. For example one of the concepts you are responsible for is elasticity. You could choose to memorize all of the possible
elasticity forms and types of elasticity. A much better way would be to remember the concept of elasticity, simply a percentage change in one variable verses a percentage change in another variable. You can write
that out in words, convert the words to symbols and then you can then convert that idea into various ways to define and manipulate a ratio of percentages as you need it.
Thus if the question concerns Income elasticity (or any elasticity) you know that this is (written as a formula): (%Change in
Quantity)/(%Change in Income) =( %Q)/(%Y )= (Q/Q)/(Y/Y). You realize that perhaps the best way to calculate percentages is over the average numbers thus you use: (Average %Q)/(Average%Y). You might choose to convert
to a very small percentage change by using the form: (Q/Q)/(Y/Y) and changing to: (Q/Y)(Q/Y) and then change the 's to very small amounts which would result in the derivative form: (dQ/dY)(Q/Y). If you try to
remember only this final formula and you forgetyou're stuck. In other words, if you are going to add, learn the process of adding rather than trying to remember the answer to all possible addition problems.
