Using the market shares in the table above, if Big W wants to buy Widgette, the Federal Trade Commission will probably
A) approve the merger because the industry is moderately concentrated and the increase in the Herfindahl-Hirschman index (HHI) is small enough.
B) block the merger because the industry is moderately concentrated (HHI between 1,500 and 2,500 ) and the increase in the HHI is too much.
C) approve the merger because the industry is highly concentrated (HHI exceeds 2,500 ) but the increase in the HHI is small enough.
D) block the merger because the industry is highly concentrated (HHI exceeds 2,500 ) and the increase in the HHI is too much.
D
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Refer to Supply and Demand. Deadweight loss
The following questions refer to the accompanying graph, which shows the supply and demand for military service where Q0 represents the quantity provided by a volunteer army and Qd the quantity provided by a draft.
a. is eliminated by a limited draft.
b. occurs only with a volunteer army.
c. occurs only with a draft.
d. Occurs with both a volunteer army and with a draft.
Financial innovation is
A) the process of turning assets into a more liquid form. B) the development of new financial products and services. C) responsible for credit cards being included as part of money. D) causing a decrease in bank profits.
The measure of production that values production using current prices is called
A) nominal GDP. B) value-added GDP. C) real GDP. D) underground GDP.
Suppose the production of a good results in positive externalities. If output occurs at the intersection of the marginal social benefits curve and the supply curve, then
A. output will be at a higher level than if all benefits were not taken into account. B. output will be at a lower level than the socially optimal level. C. the marginal private benefit curve will lie above and to the right of the marginal social benefit curve. D. there will be underproduction. E. all of the above