According to the Justice Department and the Federal Trade Commission, a merger would likely be challenged if
A) the post-merger industry has an HHI above 1,500 and the HHI rises by more than 100.
B) the post-merger industry has an HHI above 500 and the HHI rises by more than 50.
C) the number of firms in the post-merger industry is very large.
D) the firms' markets are very large.
Answer: A
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Which of the following is cited as a problem with the kinked demand curve model?
A) It assumes that firms do not attempt to maximize profits. B) It assumes that firms determine the profit-maximizing level of output by equating marginal cost and average variable cost. C) It does not explain how the equilibrium market price is determined. D) It does not explain the price stickiness that is routinely observed in oligopolistic markets.
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What costs would be considered when calculating economic profit?
A. The opportunity cost of his job and interest forgone of $64,000, and the explicit cost of $8,000 B. The implicit cost of the interest forgone of $4,000 and the explicit cost of $8,000 C. The explicit cost of $8,000 D. The implicit cost of his job of $60,000 and the opportunity cost of forgone interest of $4,000
Refer to the figure below. Player A can infer that Player B will:
A. choose Left. B. choose Left when A chooses Up and choose Right when A chooses Down. C. choose Right. D. Player A cannot infer anything about what Player B will do given this matrix.
CARFAX is a company that compiles and sells histories of used cars. CARFAX reduces the:
A. number of cars exchanged in the used car market. B. information asymmetry in the used car market. C. number of used cars offered for sale in the market. D. cost of used cars in the market.