Economics 251 – Essay Component – Midterm Exam 2 – Spring 2004

These topics cover subjects addressed in Chapters 22 to 28 in the text. Choose any two the ten topics, which are introduced as news clips in the “In the News” segments in the text. (except for the last topic). Next find an article for each that is consistent with the topic. Then write an essay for each topic, summarizing the article as it addresses the theme and the discussion in the article. Your submission should be typed and no more than 3 pages double-spaced in total. As before, please attach your articles to your submission. The assignment is due on April 20 (for the Monday/Wednesday class), and April 21 (for the Tuesday/Thursday class)

Page 473 – Accounting versus economic profits.

Page 475 – Easy of entry, and diminished profits in perfectly competitive markets.

Page 487 – The shut-down decision in the short run, and exit decision in the long run.

Page 527 – Monopoly has an incentive to keep new technology off the market.

Page 531 – Microsoft acts like a monopoly, by erecting entry barriers and suppressing innovation.

Page 543 – Rival oligopolists rely on advertising and product differentiation to gain market share.

Page 544 – Price leadership only works in oligopoly if all rival firms increase price simultaneously.

Page 554 – Rival oligopolists increase market share by erecting entry barriers and acquiring (taking over) other firms.

Page 564 – Define the importance of brand loyalty in maintaining or increasing market share, and higher prices in a monopolistically competitive industry.

Page 606 – Profile a country’s programs to control pollution by means of “green taxes”.