Midterm Exam Guide
Markets, Institutions, Time, and Valuation
Exam logistics
- Date: Monday, October 19
- Coverage: Weeks 1–7
- Bring: calculator and writing tools
- Authoritative instructions: Brightspace announcement for the exam
You should be able to
Markets and welfare
- solve and graph supply, demand, and equilibrium;
- calculate and interpret surplus and elasticity;
- derive private and social marginal curves;
- find efficient quantity, deadweight loss, and a corrective charge.
Rights and institutions
- distinguish property regimes and dimensions of a rights bundle;
- apply the Coase benchmark;
- diagnose transaction costs, public goods, common pools, and government failure.
Time and scarcity
- calculate present value and NPV;
- test discount-rate sensitivity;
- solve a two-period allocation;
- calculate scarcity rent and apply the Hotelling condition;
- reason about extraction cost, discovery, recycling, and a backstop.
Valuation
- distinguish use and non-use values;
- compare CVM, choice experiments, travel cost, hedonic, and benefit transfer;
- identify validity threats and potential double counting.
Practice prompts
- A pumping market has linear demand, private cost, and marginal external damage. Solve the market and efficient outcomes.
- Reassign the right to a wetland. Identify the efficient use, feasible transfers, and transaction costs.
- Allocate a 60-unit stock across two periods at a stated interest rate.
- Explain why Hotelling’s rule is an arbitrage condition rather than a universal price forecast.
- Choose a valuation method for a park, a view, a species, and water reliability.
Best review method
Close your notes. Work one graph, one allocation calculation, and one method-choice explanation from a blank page. Then compare with the model and explain every correction aloud.