Question1. Make a distinction between the dissimilar types of concentration measures.
Question2. Derive and illustrate the Dorfman and Steiner condition for optimal advertising.
Question3. Outline how marginal revenue productivity (MRP) theory recommends that level of wages in an industry is determined under both imperfect and perfect competition?
Question4. Assume a firm is a monopolist in the labour market it appoints. Its MRP of labour is 14 – L and the wage rate is W = 2 + L.
a. How much labour the firm will hire and what wage rate it will pay?
b.How much labour it will hire and use if a minimum wage rate of $ 10 is imposed on it.
Question5. Use a simple human capital model to illustrate the rationale for undertaking higher education.
Question6. Why do some people vary significantly in amounts of human capital which they obtain? For illustration, why is Paul a high school dropout, Erwin a high school graduate and Chapman PhD?