MA Economic Theory Comprehensive Exam Study Guide


All MA students are required to pass a comprehensive examination in economic theory.  The exam is based on the material taught in ECON-500 and ECON-501 during the previous two years.  The study guide below outlines topics that are covered on the exam.  The questions and answers included in this document are examples of the types of questions included on the comprehensive exam, but do not represent the universe of questions that could appear on the exam.  Students should review previous comprehensive exams for additional examples of comprehensive questions.



I.              Consumer Theory

A.    Derivation of Demand (Questions, Answers)

1.      Preferences, Utility, and Budget Constraints

2.      Utility Maximization and the Derivation of Marshallian Demand

3.      Expenditure Minimization and the Derivation of Hicksian Demand

4.      Measuring Consumer Welfare: Consumer Surplus, Compensating Variation and Equivalent Variation

5.      Demand Elasticities

B.     Income and Substitution Effects (Questions, Answers)

C.     Revealed Preference (Questions, Answers)

D.    Choice Under Uncertainty (Questions, Answers)

II.           Producer Theory (Questions, Answers)

A.     Technology/Production Functions

B.     Derivation of Long-Run and Short-Run Cost Functions (Cost Minimization)

C.     Profit Maximization—Derivation of the Supply and Profit Functions

D.    Supply Elasticity

E.     Producer Surplus

III.         Competitive Markets and Welfare

A.    Characteristics of a Competitive Market

B.     Derivation of the Short-Run and Long-Run Equilibrium in a Competitive Market (Questions, Answers)

C.     Derivation of Short-Run and Long-Run Supply Curves

D.    Welfare Analysis in a Competitive Market, including welfare analysis associated with price floors, ceilings, taxes, subsidies, and trade policies. (Questions, Answers)

IV.        Market Power

A.    Monopoly (Questions, Answers)

B.     Price Discrimination (Questions, Answers)

C.     Profit Maximization in an Oligopoly (Bertrand, Cournot, Stackelberg, and Collusive Equilibrium) (Questions, Answers)

D.    Monopolistic Competition

V.           Externalities (Questions, Answers)

VI.        Public Goods (Questions, Answers)

VII.      Imperfect Information


You can find answer guidelines to the June 2010 Macroeconomics Comprehensive at this site.