Industrial Economics - Summary of Exercises

Chapter 1 Introduction to Industrial Economics

1. Explanation of terms

1. Industry: It is the various departments of the national economy engaged in product production and operations that are divided according to a certain social division of labor to meet certain social needs.

2. Marshall Conflict: The pursuit of economies of scale and the resulting monopoly stifling the vitality of competition constitute a pair of indissoluble contradictions, which is the famous "Marshall Conflict"

3. Competitive market: refers to such a market, there is a threat of entry of other manufacturers, even if there are only a few manufacturers (or only one manufacturer), the industry is very competitive, the number of manufacturers is small, but if the price exceeds the cost , there will be many firms entering the industry, such a market is called a "competitive market"

4. Industrial laboratory research method: The industrial laboratory research method is to use the computer to observe some variables that cannot be observed in the real market in the laboratory, such as confidence, marginal cost to product price and thus to manufacturers' market share and market concentration. , and then by controlling some variables to examine the causal relationship between the variables most relevant to the researcher.

5. General equilibrium analysis: It is to study all the interconnected markets as a whole. General equilibrium analysis is a research method about the price and output structure of the entire economic system, and it is a more thoughtful and comprehensive analysis method.


Five: short answer questions

1. What is the relationship between industrial economics and industrial economics research methods?

A: Any subject theory is closely related to its research methods. To sum up, there are the following three points:

First: the selection, application and innovation of research methods serve the development and progress of economic theory, and they are the relationship between means and ends

Second: The research method is relatively independent, one method can be used for a variety of theoretical studies, and one theory can use multiple methods;

Third: The innovation of research methods often becomes the starting button and key link of theoretical breakthroughs. The introduction of a new research method can often open up new fields for theoretical research and contribute to new research results.


2. What are the deficiencies of game theory methods in analyzing imperfect competition?

Answer: The game theory method has shortcomings in analyzing imperfect competition, mainly in three aspects:

First: Bounded rational people can solve complex multi-stage game problems assumptions, pushing rational principles too far and not in line with reality

Second: the multiple equilibrium outcomes of the heavily used non-cooperative game models are sensitive to small changes in assumptions, making the equilibrium very fragile.

Third: the lack of favorable support from empirical data, which is the biggest shortcoming of game theory analysis. Many of the inferences of game theory are premised on strict assumptions, which make the testing of game-theoretic models quite difficult, and the conclusions cannot be confirmed or falsified.


3. Briefly describe several main classifications of industries?

Answer: The main classifications are:

1) The production structure classification method: including Marx's two major department classification method, which divides industries into the industrial department (the first department) that produces the means of production and the industrial department (the second department) that produces the consumption material;

The classification method of agricultural light and heavy industries divides industries into agriculture, light industry and heavy industry;

Hoffman's industry classification method divides industries into three categories: consumer materials industry, capital materials industry, and other industries

2) Three-industry classification method; according to the three stages of development of human economic activities, industries are divided into the first industry represented by agriculture, the second industry represented by industry, and the third industry represented by service industry .

3) Standard industrial classification method: an industrial classification method formulated and promulgated by authoritative departments to unify the national economic statistics.


4. What are the specific research methods of industrial economics? What research methods have the main schools of industrial organization theory adopted?

Answer: The specific research methods of industrial economics are: case study method, statistical econometric research method, equilibrium analysis method, marginal analysis method, game theory analysis method, and industrial laboratory research method.

Harvard School: Empirical research methods based on case studies, industry comparison studies, and statistical econometric studies

The Chicago School: A Neoclassical Approach to Equilibrium Analysis.

The New Institutional School: Introducing the institutional analysis method and the "cost-benefit" method of marginal analysis.

The New Austrian School: A Behaviorist Method of Analysis.


6. Thesis topic

1. The relationship between empirical analysis and normative analysis

answer:

1)

2)


2. What is the difference between the research objects of industrial economics in Europe, America and Japan?


Chapter 2 Main Body of Industry: Enterprises

1. Explanation of terms

1. Transaction fees

2. Team production

3. Asset specificity

4. Common property issues

5. Deferred Obligation Transactions


5. Short answer questions

1. Briefly describe Williamson's explanation of the reasons for vertical integration.

2. Briefly describe Zhang Wuchang's explanation of the nature of the enterprise.

3. According to Coase's point of view, what are the main components of a firm's organizational cost?

4. Briefly describe Alchin and Demsetz's understanding of the nature of enterprises.

5. Briefly describe Bazel's understanding of the nature of the enterprise.


6. Thesis topic

1. Discuss how to determine the short-term and long-term equilibrium of the industry and the optimal size of the firm under perfectly competitive market conditions.

2. According to Coase's point of view, try to discuss why enterprises arise



Chapter 3 Industrial Organization: The SCP Paradigm

1. Explanation of terms

1. The Marshall Conflict

2. Sunk costs

3. Ad Density

4. Merger

5. Lerner Index


5. Short answer questions

1. Please briefly describe the typical schools and main viewpoints of western industrial organization theory

2. What are the relative methods of relative indicators to measure market concentration?

3. Please briefly talk about what means enterprises should adopt to expand the degree of product differentiation?

4. Why is it said that advertising is a major non-price competition method that companies often use in the market

5. Briefly describe the relationship between SCPs


6. Thesis topic

1. Please talk about the motivation and impact of corporate mergers and acquisitions

2. What is technological progress? Please talk about your views



foreword


Chapter 8 Industrial Layout: Layout and Agglomeration

1. Explanation of terms

1. Location: refers to the place or space occupied by a certain thing, which is the space of human behavior and activities. Economics defines location as the optimal operating location of enterprises, industries, and facilities in the spatial economic pattern.

2. Location factor: factors and reasons that determine the spatial distribution of industries and specific locations. Location factors are divided into general factors and special factors. General factors are related to all industries, eg, freight, labor, rent, etc.; while specific factors are related to specific industries. Among the location factors, the location factors that make industrial enterprises deploy to specific locations are called regional factors. For example, if the industry is affected by the freight and concentrates on a specific location, then the freight is the regional factor in the location factor.

3. Industrial agglomeration: refers to a large number of certain or several industries within a spatial range, forming a specialized industrial area or industrial belt.

4. Industrial layout: It refers to the dynamic combination and distribution of various sectors and links of the industry in a country or region in the region, which is a concrete manifestation of the development and movement laws of various sectors of the national economy.

5. Raw material index: Mi = local raw material weight (Wm)/product weight (Wp)

6. Location weight: (local raw material weight (Wm) + product weight (Wp)) / product weight (Wp) = raw material index + 1

7. Industrial cluster: A phenomenon in which related companies or institutions in a specific industry gather in a specific geographical location. Clusters include a series of upstream, mid-stream and downstream industries and other enterprises or institutions. These industries, enterprises or institutions are very important for competition. They include suppliers of special raw materials such as parts, equipment and services, as well as providers of special infrastructure. . Clusters usually extend down to downstream channels and customers, as well as to manufacturers of complementary products and companies related to the industry in terms of skills, technology, or common materials. Finally, clusters include government and other institutions--like universities, standards-setting bodies, vocational training centers, and trade organizations--to provide professional training, education, information, research, and technical support.


4. Short answer questions

1. How do raw materials affect the industrial layout?

Answer: According to the weight loss and weight gain of the raw materials in the production process, the raw materials can be divided into three categories:

First: pure raw materials. That is, during the production process of this raw material, its weight is almost

2. Briefly describe the main content of growth pole theory.

3. Briefly describe the basic idea of ​​Weber's industrial location theory

4. Briefly describe the new progress of industrial layout theory since the 1960s.



Chapter 11 Industrial Development: Laws and History



1. Explanation of terms

1. Industrial development: refers to the process of generation, growth and evolution of the industry, including both the evolution process of each industry and the evolution process of the entire industry as a whole. From the perspective of a single industry, if the product is the same, it is necessary to contact its life cycle to see what stage of the life cycle it is in. Is it in the formation stage, growth stage, maturity stage or decline stage? From this perspective, industrial development should be reflected in the process of starting from nothing, from small to large, and from weak to strong. From the perspective of the overall industry, it also involves issues such as industrial structure, industrial system and industrial modernization. It should be analyzed according to the stage of economic development of different countries, their resource endowments, economic foundations, history, culture, politics, etc. There are industrial structure, whether the industrial system is rationalized, scientific, advanced and modernized.

2. What is the cycle of the industry: With the advancement of technology, the growth of the industry shows the characteristics of life cycle. Its life cycle includes four stages: formation period, growth period, maturity period, and recession period. Its curve shape is roughly the same as that of the product life cycle. The same, showing an S shape.

3. Sustainable development: Its core idea is: healthy economic development should be based on ecological sustainability, social justice and people's active participation in their own development. The goal it pursues is: not only to satisfy the various needs of human beings and to fully develop individuals, but also to protect the resources and ecological environment, and not to pose a threat to the survival and development of future generations.

4. Latecomer advantage: It is proposed by Gerschen Kron, an American economist who was born in Russia, on the basis of summarizing the successful experience of Germany, Italy and other countries in economic catch-up. Gerschenkron believes that differences in the preconditions for industrialization will affect the process of development. The higher the relative backwardness, the faster the subsequent growth rate. The reason for this is that these countries have a "late-mover advantage" that benefits from backwardness. What is special about them is that the latter-mover advantage is a special advantage caused by the status of the late-mover country. If it does not exist, a late-developing country cannot create it through its own efforts, but it is a symbiosis of the relative backwardness of its economy, and it comes from the advantages of backwardness itself.

5. Balanced development strategy: refers to a strategy that realizes industrialization or modernization through the mutual support, cooperation and comprehensive development of various sectors of the national economy. Balanced development includes two aspects: one is large-scale investment; the other is balanced development of various sectors.


5. Short answer questions

1. What are the factors that affect the development of the industry?

A: There are many factors that affect the development of the industry, both internal and external.

First, technology is a huge driving force that directly affects industrial development;

Secondly, the expansion of human demand or the expansion and diversification of market demand is the direct driving force for industrial development.

Thirdly, the policies adopted by the government, whether positive or negative, of course have a great impact on the development of the industry;

In addition, other factors such as cultural and social environment, natural resource endowment, human capital and entrepreneurship, and international situation will all have influence and force on industrial development.

Even accidental or uncertain factors can cause the creation, occurrence and development of an industry.


2. What is the difference and connection between industrial development and industrial growth?

answer:

Difference: Industrial growth simply refers to the increase of industrial production capacity, economic potential, or the increase of industrial volume from an industrial perspective, while industrial development includes broader and deeper connotations.

Connection: Industrial development includes industrial growth, and industrial growth is only a subset of the industrial development set; on the other hand, industrial growth is the premise of industrial development, and without growth, there will be no development.


3. What are the existing industrial development strategies of various countries?

A: The strategy of peaceful development and the strategy of unbalanced development.

Among them, the unbalanced development strategies include: primary product export strategy, import substitution strategy, export promotion strategy

                                         Internally, there is a strategy of prioritizing the development of heavy industry and a strategy of prioritizing the development of light industry.


4. What is the specific content of the industrial life cycle?

Answer: The curve shape of the industrial life cycle is roughly the same as the curve shape of the product life cycle, both showing an S shape. Moreover, the standard forms without alienation all go through four stages: introduction, growth, maturity and decline.


5. Talk about the connotation of balanced development and unbalanced development of industries?

Answer: The balanced development strategy refers to a strategy for realizing industrialization and modernization through the mutual support, cooperation and comprehensive development of various sectors of the national economy. Peaceful development includes two aspects: one is that investment should be carried out on a large scale; the other is balanced development of various sectors.

The unbalanced development strategy advocates that developing countries should allocate limited resources selectively in certain industrial sectors and regions, first to develop these sectors and regions, and then through investment-inducing mechanisms and inter-industry and inter-regional linkages The effect and driving effect will drive the development of other industrial sectors and regions, so as to realize the development of the entire economy.

Balanced development should be a goal, and uneven development can be used as a means to achieve the long-term goal of balanced development. Whether it is a balanced strategy or an unbalanced strategy, the goals are the same, that is, the development of the industrial economy, the improvement of people's living standards, and the enhancement of national strength. The only difference is the path to the goal.


6. Thesis topic

The practical significance to China of the theoretical model of the industrial life cycle in the case of technological mutation and advanced and late-advancing countries.

Answer: The industrial growth cycle model of developed and developing countries under the technological mutation is shown in the figure below:


In stage I, the original technology paradigm dominates the development of the industry. Under the original technology, technological progress has gradually reached its limit. The new technology paradigm is in the brewing period in developed countries. The industry in developed countries is already in a mature stage under the original technology paradigm. The scale has been declining, and industrial profits have also begun to decline. Under the influence of technology introduction, developing countries are in a period of rapid growth, and industrial profits have also entered a period of growth.

In the second stage, the industrial development of developed countries has entered a period of adjustment, new technological paradigms have begun to emerge, industries supported by new technological paradigms have entered a period of formation, and equipment and technologies under the original technological approach have been accelerated to seek transfer to developing countries, so that the original The scale of the industry under the technological paradigm has declined rapidly, entering a period of adjustment between the old and the new. At this stage, the industrial scale and profits of developing countries reached a very high level under the original technological paradigm and gradually began to shrink.

In stage III, the technologies of developed countries are gradually becoming mature, the industries under the original technology paradigm have basically all withdrawn, and the industries under the new technology paradigm are in a period of expansion, which leads to the second spring of industrial development and enters the fourth phase of industrial development revitalization. . Developing countries have entered a period of industrial adjustment. Under the influence of technological restrictions, entrepreneurial stagnation and new technology paradigms, the market demand for old products has shrunk rapidly. The industry (Q2) under the original technology paradigm has entered a period of accelerated recession, and the original technology has been slowed down through the international market. The opportunities and space for the industry to decline under the paradigm are also very narrow, facing huge non-transferable conversion costs. At the same time, the industry under the new technology paradigm is still in the formative stage, and technology introduction and industrial development require huge investment. The situation of industrial losses has even brought the national industry to a standstill.

In the IV stage, the new technological paradigm has matured, and the industries of developed countries have basically become saturated at home, and they have begun to export products, technologies and industries to developing countries. After difficult adjustment and huge cost, developing countries have entered a period of industrial expansion through continuous growth after technology introduction and capital input.

As a result, the industry has ended its adjustment and entered a new period of revitalization.

From the above analysis, it can be seen that the industrial development of developing countries faces huge risks in the later stage under the condition of technological mutation:

First, the industrial development cycle of developing countries fluctuates greatly, the industry under the original technology paradigm declines rapidly, the economic and technological environment during the industrial adjustment period becomes very unfavorable, the industrial profit approaches zero, and even the entire industry suffers losses, and the industrial development may be into a situation of life and death;

Second, when there is not much room for technological progress under the original technological paradigm, and during the transition period between the old and new technological paradigms when new technological paradigms and new products continue to emerge and develop in developed countries, developed countries accelerate the transfer of technologies and equipment from the original technological paradigm to developing countries. , developing countries may fall into the "technology introduction trap" and pay the conversion cost completely for the industrial adjustment of technologically advanced countries

Third, in the era of knowledge economy, the time interval between the emergence of new technology paradigms is getting shorter and shorter, the technological competition between countries is becoming more and more intense, and the technological progress that relies solely on technology introduction brings more and more risks to industrial development. .

To this end, China must take steps to:

1: Strive to realize the organic combination of introduction-imitation-absorption-digestion-innovation

Second, China's industrial development should realize the strategic adjustment from comparative advantage, late-mover advantage to competitive advantage.


foreword

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