Suppose an industry is composed of 10 firms. Each firm's share of total sales in the industry is 10 percent. If two of the firms merge, then the four-firm concentration ratio in the industry is
A) 40 percent.
B) 45 percent.
C) 50 percent.
D) unable to determine.
Answer: C
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All else constant, an increase in the number of buyers in the market for cell phone service would cause:
A) equilibrium price and quantity to increase. B) equilibrium price and quantity to decrease. C) equilibrium price to increase and equilibrium quantity to decrease. D) equilibrium price to decrease and equilibrium quantity to increase.
Suppose that one firm produces a product that results in negative external costs to society. This information suggests that
A) resources are under-allocated to the firm. B) the equilibrium market price of the product includes the external costs borne by society. C) resources are over-allocated to the firm. D) at the market price, quantity demanded is less than quantity supplied.
Which of the following is the best example of a vertically integrated firm?
a. General Electric, which produces light bulbs, jet engines, washing machines, and so on b. Kinko's, which has a photocopy store near many colleges and universities c. USX Corporation, which owns ore and coal mines, coke ovens, blast furnaces, mills, and foundries d. Intel, which makes computer chips for most of the computer manufacturers e. Century 21, which has real estate offices that help people sell a house in one city and buy another house in another city
Using the UIP equation, what would happen to the spot rate for euros if the interest rate on U.S dollars deposits rises ceteris paribus?
A) the spot rate for euros would rise B) the spot rate for euros would fall c) the spot rate for euros would be unchanged d) all of the above could happen