Introduction and prior knowledge

 You should know what the Real Number line is.

 I expect you to understand basic set notation and be able to carry out basic operations on sets.
 You should know what an ordered set is and what a Cartesian Product is. You should also
understand what is meant by Rn.
 You should know what constitutes a function, its purpose and the terminology associated with
it. You should also be familiar with the types of functions we discussed (basically the ones given
in your book).

Linear Algebra

 I expect you to be able to solve basic equilibrium models and provide some basic analysis (e.g.
under what conditions would a solution exist or under what conditions would the solution make
economic sense).
 You should be able to write down a system of equations in the Ax = d form.
 You should understand the three cases (infinite solutions, unique solution, no solutions) in a
linear system of equations and how/why they arise.
 You should know what vectors are and be able to carry out basic operations such as linear
combination, dot products, calculating length etc.
 You should understand the concept of linear independence and how it relates to its standard
definition discussed in class.
 You should have a thorough understanding of the concepts of span, spanning sets and basis. For
example, you should be able to see what space a set of vectors spans. You should also be able to
link concepts of span and basis vectors with the concept of linearly independent vectors. For this
I suggest you look at the chapter on linear independence I have uploaded on LMS.
 It should be clear in your minds what the relationship between linear independence of rows of
the coefficient matrix and the existence of a unique solution to the system of equations is.
 Although it is unlikely (not impossible!) that I will ask you this, I suggest you go over our lecture
from 1st of September where we see the link between linear independence of columns and the
existence of a unique solution.
 You should be able to do basic matrix operations i.e. addition, subtraction, multiplication.
 You should know what the rank of a matrix is and be able to find it. You should also know the
link between rank of a square matrix, its invert-ability and the consequence for the existence of
a unique solution to the system.
 You should be able to carry out Gaussian elimination and Gauss-Jordan elimination. You should
be able to get to row echelon form for a matrix and understand its implications for rank of a
matrix.
 You should be able to find the determinant of an nxn matrix and know its basic properties. You
should also be familiar with the implications of determinant for the rank of a matrix.
 You should be able to find the inverse of an nxn matrix.
 You should be able to use Cramer’s rule to solve a system of linear equations.
  You should specifically be familiar with the details of applications we have done in class –
National Income Model, IS-LM model, Leontief Input-Output Model, basic Markov models.

Calculus

 You should understand the basic concepts of limits and continuity.

 You should be able to find limits and check for continuity and differentiability of a function.
 You should know what the derivative of a function of one variable represents graphically and in
terms of explanation. You should also be able to find it.
 I expect you to be comfortable with using the sum, difference, product and quotient rules for
differentiation.
 You should know how to apply the Chain-Rule.
 You should understand when and why an inverse function exists for a function. Essentially, it
should be clear to you what it is about monotonic functions that allows them to uniquely have
inverses.
 You should know what a monotonic function is, and how to check for it.
 Given an invertible function, you should know the relationship between the derivative of the
function and its inverse.
 For the case of functions of multiple variables you should know what a partial derivative
represents and how to find it.
 You should know what a gradient vector is and how to form it.
 You should be comfortable with the concept of elasticity (not just of demand) and be able to
calculate and comment on it. What does it mean when elasticity is more, less or equal to unity?
 You should be able to find the Total Differential of a function.
 You should be able to find the Total Derivative of a function taking into account the relationships
between the arguments of the function.
 Make sure you understand the difference between a partial derivative and a total derivative.
 You should be able to form the Jacobian matrix of a system of equations. You should also
understand the implication of the determinant of the Jacobian on Functional Dependence of the
functions. You should also understand that the coefficient matrix done previously is a special
case of the Jacobian and how linear dependence is a specific case of functional dependence.
 You should understand the use of Implicit Functions when it is difficult or impossible to get an
explicit function to represent the relationship between x’s and y. You should be able to use the
Implicit Function theorem to identify relationships between variables in such cases.
 You should know how to use Implicit Functions in the case of a system of equations. I expect you
guys to know the fundamentals of what is going on (e.g. that there are n equations involving n
endogenous variables and m exogenous variables and that we define a set of implicit functions
for the endogenous variables and so on, the role of the Jacobian here etc.).
 You should be able to solve a basic model, express the equilibrium solutions in their reduced
form and apply your knowledge of derivatives to comment on Comparative Statics for the
model. You should also be able to comment on Comparative Statics of a model without solving
it, using implicit functions.
 You should understand that the case where a model is expressed in terms of general functions
cannot be solved explicitly and must therefore be dealt with using implicit functions. You should
be able to use techniques to get to the derivative required.
 Essentially, with regards to Comparative Statics you need to know when each technique is
applicable. In most cases you’ll find that there is more than one way to get to the desired
derivative. You should be familiar with each technique and when it’s applicable, it might be
useful to think over which is most efficient in each case.
 You should have a strong grasp on the theories of the models we have discussed and able to
comment on Comparative Statics and rates of change pertaining to them i.e. the market model
and the IS-LM Model in both open and closed cases.