Question 1:

i) Derive and explain Harberger's (1954) welfare loss estimates of monopolizing a perfectly competitive firm.

ii) What are the roles of advertising? Can it lead to an increase in market concentration? Discuss.

Question 2:

i) Use a simple human capital model to explain the rationale for undertaking higher education.

ii)  Why do some people vary significantly in the amounts of human capital which they acquire? For instance, why is Sam a high school dropout, Bertrand a high school graduate and Gerard a Ph.D?

Question 3:

Write short notes on any three of the following.

i) Hannah and Kay's (1977) axioms of a good concentration measure 
ii) Dorfman and Steiner (1954) condition for optimal advertising
iii) Marginal revenue productivity (MRP) theory
iv) Occupational Licensure