Economics 390

Regional Economics

Take-home Midterm--Due Wednesday March 30 in class


1.  A manager at your company says that we need to educated workers for our company.  Using your training in economics, how would you respond to this manager.  Be sure to both provide the economics and the intuition of your answer.

2.  In a short, three to four paragraphs, explain whether you think that development or growth is more important. 

3.  Your manager informs you that they are going to expand into a new product line that will require building a new plant.  He is unsure whether the new plant should be near the final distribution point, near the raw materials, or just half-way between.  Unfortunately, he does not have any revenue or cost information.  You, however, need to use your skills in economics to provide some guidance.  Provide a general overview of how she should make this decision.

4.  Describe clusters and how they affect community economic development.

5.  You are hired by a local government to determine how well the city and its industries have been doing relative to the state.  Below is the city's output in agriculture, manufacturing, and services and the state's output in the same categories.  In a short essay, inform the city how much of their change can be attributed to changes at the state level, whether they have a positive mix in strong growth sectors, and if their sectors are competitive compared to the state.


  State GDP (in millions)      
  2000 2010 2000 2010
Agriculture 320 257 40 48
Manufacturing 640 578 50 52
Services 320 450 30 25
Total 1,280 1,285 120 125


6.  If you had two goods with the below direct requirement matrix, what is the direct and indirect requirement matrix?



Good A

Good B

Good A



Good B



If you want to produce 50,000 of each good for purposes other that producing either good A or good B, how much should one produce of each good?


7.  Your company is debating about providing funds for motivated employees to get their MBA.  Your boss has provided the data in the link below.  Using a simple regression show your boss the average expected return for and additional year of experience at work and the average expected return for an additional year of education.  Provide your boss with a short response of your suggestion based on your results.