ECOS2001 · Intermediate Microeconomics
The Complete Exam Bible · S1 2026Intermediate Microeconomics
ECOS2001 Intermediate Microeconomics is the University of Sydney's second-year core micro-theory unit, taught from Varian's Intermediate Microeconomics 10e. It builds applied optimisation skill across consumer theory, the exchange economy and welfare theorems, choice under uncertainty, producer theory and costs, perfect competition, general equilibrium, game theory and the economics of information.
It is assessed by participation (5%), four online quizzes plus an early-feedback quiz (20%), a 25% closed-book in-person mid-semester exam on Topics 1–5, and a 50% closed-book in-person final exam on Topics 6–13 only. The unusual and exam-critical fact: the two exams cover disjoint halves of the course — the midterm is the consumer side, and the final (the dominant 50% stake) tests producer/market/strategic theory from uncertainty through asymmetric information, with no Topic 1–5 questions. Because both exams are closed-book and no formula sheet is provided, the marks are earned in the fast, correct setup — the Lagrangian, the first-order conditions, the tangency, the reaction function — before any final number.
What ECOS2001 covers
The whole subject → one exam-ready map. Each topic links to its free chapter guide.
How ECOS2001 is assessed
| Component | Weight | Format |
|---|---|---|
| Attendance / Participation | 5% | Attend and participate in tutorial activities |
| Online Quizzes ×4 + Early-Feedback Quiz #1 | 20% | Quiz #1 (Early Feedback) due Sat Week 3 (up to 4% of the overall mark); the four quizzes are due Fridays of Weeks 6, 9, 11 and 13 at 11:59pm. Each quiz = 15 randomised MCQs from a large test bank, up to 5 attempts with the highest score kept; no extensions, missed quizzes are reweighted |
| Mid-semester exam (In-Semester Test) | 25% | In-person paper-based, 60 minutes, closed-book; Sunday 19/04/2026 9:40am (Week 7); 20 MCQ (20 marks) + 1 short-answer with parts a, b (5 marks) = 25 marks; covers Topics 1–5; non-programmable calculator allowed |
| Final exam | 50% | In-person written (not online), 120 minutes + 10 minutes reading, closed-book; Friday 19 June 2026 9:00am; 20 MCQ × 2 (40 marks) + 3 multi-part short-answer × 20 (60 marks) = 100 marks; covers Topics 6–13 only; non-programmable calculator allowed |
Cobb-Douglas consumer optimum (closed-book short-answer setup)
- 2 marksWrite the marginal rate of substitution (a magnitude) from the marginal utilities: MRS = MUₓ/MU_y = [(1/4)x^(−3/4)y^(3/4)] / [(3/4)x^(1/4)y^(−1/4)] = y/(3x).
- 2 marksState the interior optimum condition — the indifference curve is tangent to the budget line: |MRS| = pₓ/p_y, so y/(3x) = 2/6 = 1/3, which gives y = x.
- 1 markWrite the budget constraint that must bind: pₓx + p_y·y = m, i.e. 2x + 6y = 48.
- 2 marksSubstitute y = x into the budget: 2x + 6x = 48 → 8x = 48 → x = 6, and therefore y = 6.
- 1 markCheck with the Cobb-Douglas share rule (a/(a+b) of income on x): x = (1/4)·(48/2) = 6 and y = (3/4)·(48/6) = 6 — consistent.
Key terms
- Marginal rate of substitution (MRS)
- The magnitude of the slope of an indifference curve, MRS = MU₁/MU₂ (a positive number) — the rate at which a consumer will trade good 2 for good 1 while staying equally well off. At an interior optimum it equals the magnitude of the budget-line slope: |MRS| = p₁/p₂. The MRS is invariant to any monotonic transform of utility, which is why utility is ordinal.
- Slutsky decomposition
- Splits the total effect of a price change into a substitution effect (the move when relative prices change but the old bundle is just affordable) and an income effect (the change in real purchasing power). The substitution effect always opposes the price change; a Giffen good needs an income effect strong enough to overturn it.
- Pareto efficiency
- An allocation from which no one can be made better off without making someone else worse off. In an exchange economy this requires MRSᴬ = MRSᴮ; the set of all such allocations is the contract curve. The First Welfare Theorem says any competitive equilibrium is Pareto efficient.
- Certainty equivalent (CE) & risk premium
- The certainty equivalent is the sure amount giving the same utility as a gamble, U(CE) = EU. The risk premium = EV − CE is how much expected value a person will give up to avoid the risk. A risk-averse agent (concave U, U″ < 0) has CE < EV and a positive risk premium.
- Nash equilibrium
- A strategy profile in which every player is best-responding to the others, so no one gains by deviating alone. A pure-strategy Nash equilibrium is a mutual-best-response cell of the payoff matrix; the subgame-perfect refinement (found by backward induction) adds optimality in every subgame, ruling out non-credible threats.
- Cournot equilibrium
- The Nash equilibrium of a quantity-setting oligopoly: each firm chooses output to maximise profit given the rival's output, generating reaction functions that intersect at q₁* and q₂*. Output sits between monopoly and perfect competition, so price exceeds MC and a deadweight loss remains.
ECOS2001 FAQ
Is ECOS2001 hard?
It is a step up from introductory micro because it is genuinely a problem-solving subject: most marks come from setting up and solving an optimisation (the Lagrangian, the first-order conditions, the tangency or reaction function) correctly and quickly. The models themselves are a manageable list, and both exams are closed-book, so once you can reliably set up the standard patterns — Cobb-Douglas demands, a Slutsky decomposition, a Cournot equilibrium, the GE recipe — the difficulty is mostly about speed and accuracy under time pressure rather than memorising obscure material.
What is the difference between what the mid-semester exam and the final exam cover?
They cover disjoint halves of the course — this is the single most important fact for planning revision. The mid-semester exam (25%, Week 7) tests the consumer side, Topics 1–5: budget and preferences, choice and demand, comparative statics, Slutsky/income effects, and the exchange economy. The final exam (50%, 19 June 2026) tests Topics 6–13 only — uncertainty, production, costs, competition, general equilibrium, game theory and asymmetric information — with no questions from Topics 1–5. Near the final you do not re-revise budget lines for marks, but you do need the producer/market/strategic block cold.
Are the exams open-book, and can I bring a calculator?
Both exams are closed-book and in person — you cannot bring any notes, and no formula sheet is provided, which is exactly why a clean topic → model → formula map you have internalised is worth so much. You may bring a non-programmable calculator, your student ID card, and pen/pencil and an eraser. The final is 120 minutes plus 10 minutes reading time; budget roughly 45 minutes on the 20 MCQs (about 2.25 minutes each) and the rest on the three multi-part short-answer questions.
How are the quizzes structured and do they count for much?
There are four online quizzes plus an early-feedback Quiz #1, together worth 20%. Each quiz is 15 randomised multiple-choice questions drawn from a large test bank, with up to five attempts and your highest score kept. Quiz #1 is due Saturday of Week 3 (worth up to 4% of the overall mark); the other four fall on Fridays of Weeks 6, 9, 11 and 13. Because the bank is large and randomised, the best preparation is to drill the underlying methods — which is exactly what MCQ-style practice on each topic rehearses.
Is there a hurdle I have to pass?
The official source material does not state any single-component hurdle — you pass on the weighted total across participation (5%), quizzes (20%), the mid-semester exam (25%) and the final (50%). Always confirm the current rules in your own unit outline, but the practical point is that the 50% closed-book final is by far the largest stake and the producer/market/strategic half (Topics 6–13) is where those marks live.
How to study for the exam
Treat ECOS2001 as a two-front campaign and a setup-first subject. (1) Plan around the disjoint coverage: the midterm is Topics 1–5 (consumer side) and the final is Topics 6–13 only — do not waste late-semester revision re-doing budget lines, but make sure uncertainty, production, costs, competition, general equilibrium and game theory are automatic. (2) Build one clean topic → model → formula map you can reproduce from memory, because both exams are closed-book with no formula sheet and the value is in not having to re-derive the standard tools under time pressure. (3) Drill the recurring patterns with fresh numbers until the layout is reflex: Cobb-Douglas / Leontief / quasi-linear demands, a Slutsky decomposition, the cost-minimisation MRTS = w/r, the long-run zero-profit price and number of firms, the Cournot reaction-function solve, and the 5-step general-equilibrium recipe. (4) Always write the setup before the arithmetic — the MRS or FOC, the binding constraint, the reaction function — since every short-answer part awards marks for correct setup even before the final number. (5) Use the randomised 15-MCQ quizzes (five attempts) as method rehearsal, not as a grade to grind, and bank exam time for the two short-answer high-mark patterns on the final: the high-value GE-with-production problem and the vertical/sequential oligopoly (short-answer questions are 20 marks each).
