What should I study?

Midterm II covers the material discussed in class after Midterm 1: Endowments, Labor Supply, Intertemporal choice (borrowing and saving), choice under uncertainty (this material is also covered in Chapters 9,10 and 12 in the textbook, but it is a good idea to use your class notes before you start using the book). Implicitely the exam will also contain material from earlier chapters, such as finding an optimal consumption choice. This time, however, I will always give you the MRS, i.e., you will not have to compute it.

Again note that you will have to solve problems for the exam. So the best way to prepare for the exam is to do practice problems. Understanding the theory is crucial as it will enable you to answer questions even if they differ somewhat from questions that you have seen before. In other words, do not memorize procedures but strive to understand the concepts and methods.

Format of the Exam

The format of Midterm II will be similar to that of Midterm I. The maximum score on the exam will be 100 points.

Sample Exam Questions

As indicated above, the best way to prepare is to the homework, the practice questions and the workbook questions. Each of these questions can be considered as sample question (a few of them will be on the exam in only a slightly modified form). If you want to know a more detailed answer about a workbook questions that is not posted, please stop by during my office hour.

Time

You will have 80 minutes to complete the exam.

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