This document provides summarized answers to the Microeconomics state exam questions at the IES FSV UK (Institut ekonomických studií Fakulty sociálních věd Univerzity Karlovy).
The exam questions were:
- Preference relations, utility functions, choice rules, weak axiom of revealed preference, the relationship between preference relations and choice rules.
- Commodities, consumption set, competitive budget, Walrasian (market, ordinary) demand correspondence and its properties. The weak axiom of revealed preference and the law of demand.
- The utility maximization problem. The properties of optimal consumption vector and of the value function of the utility maximization problem.
- The expenditure minimization problem. The properties of optimal consumption vector and of the value function of the expenditure minimization problem.
- Relationships between demand, indirect utility and expenditure functions.
- Integrability. Welfare evaluation of economic changes. Strong axiom of revealed preference.
- Production sets, profit maximization and cost minimization.
- Perfect information games. Backwards induction. Distinction between strategies and outcomes. Stackelberg model.
- Application of backwards induction to bargaining. Rationalizability and iterated weak dominance. Mixed strategies.
- Equilibrium solution concepts (Nash equilibrium, Subgame perfect Nash equilibrium) and their applications (Cournot and Bertrand models).
- General equilibrium in a pure exchange economy. Edgeworth box. Welfare properties of Walrasian equilibria.
- General equilibrium in a production economy. First and second welfare theorems.
- General equlibrium under uncertainty. Contingent commodities, sequential trade, Arrow-Debreu equilibrium, Radner equilibrium, Asset markets.