151Study Sheet for Midterm

151Study Sheet for Midterm - Study Sheet for the Final Exam...

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Study Sheet for the Final Exam Economics 151A The final exam will be held on Monday, December 9 th from 10:30am to 12:30pm and will cover the material presented so far in the lecture and in discussion section. Below is a list of possible topics that could be on the exam and the details I find the most important. It is not a comprehensive list of everything that could be on the exam but is a good representation of the types of things you should know. Anything in the book that was not mentioned in lecture will not be on the exam. However, I recommend that you read the portions of the book covered in the lectures in order to get a solid understanding of the material. Also, the problems at the end of the chapters are good practice for the problems on the exam. Topics since the second midterm will make up 75-80% of the material represented on the exam. 1. The Neoclassical Model of Labor-Leisure Choice a. Understand and find slope of indifference curves b. Understand and find slope of budget constraint c. Find equilibrium levels of leisure and consumption d. Graph and understand dynamics of effect of nonlabor or labor income changes on leisure and consumption (understand and interpret income and substitution effects) e. Understand and find the reservation wage 2. The Labor Supply Curve a. Understand and calculate labor supply elasticity b. Understand the problems with elasticity estimates 3. Ashenfelter and Heckman (1974) a. What model did they use to test income and substitution effects b. What did they find c. How does this compare to the general consensus in the literature regarding model and results 4. Income Maintenance Programs a. Understand, graph and calculate implicit tax rates of social programs b. What are the income and substitution effects of a program such as AFDC and a program such as the earned income tax credit (EITC) c. Calculate and graph the leisure-consumption opportunities under a sample EITC
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151Study Sheet for Midterm - Study Sheet for the Final Exam...

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