REGIONAL ECONOMICS MID-TERM EXAM

Regional Economics Lecture 3

J. M. Pogodzinski

Agenda

• Governance structures • Sources of • Evidence for • Effects of

• Market structures • Perfect Competition • Monopolistic Competition

• Review of simple Keynesian macroeconomic model (basis for the economic base model)

Keynesian Macroeconomic Model

• Equilibrium condition • Consumption function • Marginal propensity to consume

• Investment function

• Solving the model

• The spending multiplier

Governance Structures

• Governance structures, incentives, and efficiency (e.g., SB50) • ABAG • Tax sharing incentives

Governance Structures

• Spillovers from municipal investment projects • Zoning and building codes – spillover effects • Efficiency implications • NIMBY-ism

Market Structures

• Perfect competition • Assumptions • Efficiency implications • Mathematical/graphic representation

• Imperfect competition • Non-price discriminating monopolist

• Assumptions • Efficiency implications • Mathematical/graphic representation

Market Structures

• Imperfect competition • Perfectly price discriminating monopolist

• Assumptions • Efficiency implications • Mathematical/graphic representation

• Monopolistic competition • Assumptions • Efficiency implications • Mathematical/graphic representation

• Why not just assume perfect competition?

Monopolistic Competition

• Many varieties of goods • Can determine equilibrium number of firms/number of varieties