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2013 MT #1 Guidelines

Midterm #1

The midterm itself is on a separate page under Cold Tests. Go to Midterm

I may have one graphical or simple algebra problem, or interpretation of a formal model. Other parts will be narrative. One page notes acceptable. Use Blue Book, enclose notes. Handed out Wednesday, due Friday (or first class day you’re in town).

Total time for MT: 2 hours

You should have read and be familiar with the following topics.
Martin Chapters 1, 2 and 9:

• perfect competition and basic demand model

– demand curve and elasticities

• our basic monopoly model

– graph and equation

– causes & side effects of monopoly

– policy responses to monopoly

– skim but do not spend much time on §2.4: experimental evidence – we have too few people in class to play such games. do read §2.5 on empirical evidence.

• market structure (Skip §9.3.3 – you have neither the jargon nor the math models to make sense of the calculation of the theoretical number of firms. In other words, do not worry about any of the math or formal graphical models.)

– basic measures of concentration & other aspects of structure (C, H….)

– economies of scale: concepts and empirical approaches

– industry dynamics

Tremblay & Tremblay Chapters 1-3

• basic aspects of industry

– demand structure

– economies of scale

– industry dynamics

– market power (?! or not !?)

• dynamics of industry

– major changes over time

Hotelling Model

• what lessons do we learn from it?

– S-C-P structure-conduct-performance

– robustness of models and equilibrium

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