Topics for Midterm 2

Chapter 5
Demand analysis: 
	surveys
	market simulations
	test-markets
	regressions with secondary data 
	Standard deviation, t- statistics, R-square
	Use of demand structure to forecast demand
	Deriving elasticities from regression coefficients
	Own-price elasticties: elastic versus inelastic demand
	income elasticities: inferior goods, normal goods, luxury goods and necessities
	cross-price elasticities: Substitutes, Complements and Unrelated Goods

Applications
	ISU Enrollment 
	Demand for beef: the effects of advertising
	Transportation mode: incorporating product attributes into the model

Chapter 6
Forecasting:  Not much emphasis
	Leading indicators
	Trend fitting
	Publicly available macroeconomic forecasts 

Chapter 7
isoquants and isocosts
production functions in the short- and the long-run
stages of production
output elasticities
scale elasticities
marginal product and average product
Optimal short-run input demand: w = P*MPl
Optimal long-run input demands: (MPl/MPk) = (w/r)
			      or (MPl/w) = (MPk/r)
efficient labor allocation across plants
Pay for productivity
estimation and interpretation of Cobb-Douglas production functions
Unit Labor Costs
Applications:
	Agricultural Production and input demands across countries
	Agricultural input use over time
	Unit Labor costs and wages
	Unit Labor costs and international competitiveness

Chapter 8: Not much emphasis

Chapter 9
relationship between production and cost functions
fixed versus variable cost
average cost versus marginal cost 
Shut down price = mininmum of average variable costs
long run versus short run average cost curves
minimum efficient scale
estimation and interpretation of cost functions
     regression
     gradient method
     survivor method
profit maximization and cost minimization
marginal cost equals marginal revenue
Application:
	Department store chain in Slovenia

Chapter 11
market structures
   perfectly competitive firms
     assumptions
     optima
   monopolistic firms
     types of barriers to entry 
     welfare loss
     assumptions
     optima
     regulation--pros and cons
   monopolistic competition
     Optimal advertising
     Advertising-Sales ratios and market structure
     Search goods, experience goods, and credence goods

Chapter 13: 470-477
Optimal Markup pricing

Chapter 16: 581-601
Herfindahl Index
4-firm concentration ratio