Suppose there are four firms in an industry. The market shares of the four firms are 5 percent, 20 percent, 35 percent, and 40 percent. The Herfindahl-Hirschman index for that industry is
A) 6,650.
B) 3,250.
C) 1,250.
D) 100.
Answer: B
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Claude's Copper Clappers sells clappers for $60 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $65, average variable cost is $25, and average total cost is $62 . To improve his profit/loss situation, Claude should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price
Which of the following is part of the synthesis view of fiscal policy?
a. Automatic stabilizers offset some of the fluctuations in aggregate demand without any government action. b. Fiscal policy is much less potent than the early Keynesian view implied. c. The effectiveness of discretionary fiscal policy as a stabilization tool is highly questionable given the difficulties in proper timing. d. All of the above are correct. e. None of the above is correct.
A PPF can
A) shift outward but not inward. B) shift inward but not outward. C) shift inward or outward. D) shift neither inward nor outward.
The total utility of consuming 6 units of a good is 255. The marginal utility of the 6th unit is 45 and the marginal utility of the 5th unit is 65. The total utility of consuming 5 units of the good is
A) 300. B) 150. C) 215. D) 195.