1- Suppose that a company based in Dallas, Texas, confronts only four other rival firms. Its own market share is 35 percent, which ties it with the other largest producer and seller in the industry. The other three firms each have a 10 percent market share.

a. What is the four-firm concentration ratio for this industry?

b. what is the value of the Herfindahl-Hirschman index?

2- Explain why network effects can cause the demand for a product either to expand or to contract relative to what it would be if there were no network effects.

3- The table below shows recent worldwide market shares of producers of printers.

FIRM SHARE OF WORLDWIDE MARKET SALES

Brother 1%

Canon 22%

Dell 14%

Epson 10%

Hewlett-Packard 27%

Lexmark 7%

Samsung 16%

Other 3%

a. In this year, what was the four-firm concentration ratio in the printer industry?

b. In this year, what was the eight-firm concentration ratio in the printer industry?

c. What is the concentration ratio used for?

d. What is the value of the Herfindahl-Hirschman Index for the printer industry?

e. Characterized the value calculated in part d.

4- Since the early 2000s, the average rate of growth of per capita real GDP in Mozambique has been 4% per year, as compared with a growth rate of 8% in China. If a typical resident of each of these nations begins this year with a per capita real GDP of $6,200 per year, about how many more dollars' worth of real GDP per capital would the person in China be earning 10 years from now than the individual in Mozambique? Please show work