It's a little late for advice as I'm in the midst of grading Ph.D. preliminary exams. It's the first time I've done this and it is an eye-opening experience. The experience inspires me to take a break and write down some advice for future students on how to study and take the prelim exam:
Guidelines for studying for a PhD preliminary exam in microeconomics:
1. Read a lot of economics at different levels and try to connect the dots. You’ve just finished your first-year Ph.D training studying more advanced books. Now go back and re-explore undergraduate textbooks. You may see them in a different light. When reading principles-level material, stop at times to think about how you might approach the same material at a more advanced, mathematical level. When reading more advanced material, stop at times to think of practical real-world applications and how you might communicate concepts in non-technical ways to non-economists.
(a) Read at least two good principles of economics textbooks, carefully, cover to cover. I recommend the following: Frank and Bernanke, Case and Fair, Mankiw, Krugman and Wells. Others are good too.
(b) Read at least one good intermediate economics textbook, cover to cover, carefully. I would recommend: Pindyck and Rubinfeld, Perloff, Varian, Mclosky (fee at: http://deirdremccloskey.org/docs/price.pdf ), Silberberg.
(c) Read two or three light armchair economist books, like Freakonomics, Frank’s The Economic Naturalist, and books by Steven Landsburg.
Seem like too much reading? Maybe a PhD isn’t for you. This much reading, and more, should be FUN. As a practicing economist you will read at least this much every month or two.
2. Do lots and lots of problems. Review all your problems from intermediate and graduate level microeconomics. Try to think if there are any broader implications to the questions, especially ones that are more advanced or technical. What do you think the writer of the question is trying to lead you toward? Often there is more to it than math tricks—the economist who wrote the question may have a broader conceptual point to make. Problems from Varian’s Microeconomic Analysis can be good, and solutions are available online. Hirshleifer and Riley has some wonderful problems. Then there are the contemporary standard PhD microeconomics textbooks: Mas-Colell, Whinston and Green and Jehl and Reny. Dive in.
3. Do as many problems as possible from old preliminary exams.
4. Discuss problems and interesting economic ideas with your classmates. This is fun, and you’re likely to learn a lot from each other.
Guidelines for taking a PhD preliminary exam in microeconomics:
1. Think before you write.
2. If your gut instinct is to give an answer that doesn’t have to do with how incentives affect behavior, stop and think again. If you really, really want to give an answer that is not economics based, then only do so after giving an answer that is based in economics, and explain with subtlety and insight the strengths and weaknesses of the alternative viewpoints.
3. It’s better not to answer a question than to answer it stupidly. A stab in the dark is wrong with probability greater than 0.99. A stupid answer makes the grader think you really don’t belong in graduate school and that they would be doing you a favor by failing you.
4. An okay answer explains the intuition OR provides mathematical formalism. A better answer does both. An excellent answer turns over the problem and considers different possibilities, both intuitively and formally. Excellent answers are quite rare. A few excellent answers will wow the grader even if you don’t complete all questions on the exam.