Consider an industry consisting of four firms with market shares of 30 percent, 25 percent, 25 percent, and 20 percent. Calculate the Herfindahl Hirschman Index and interpret your result.
What will be an ideal response?
| HHI = (302+ 252+ 252+ 202) = 2,550. The industry is considered to be highly concentrated as the HHI number exceeds 1,800. |
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_____ helps to estimate the rate of growth of GDP of a nation
a. The rule of 70 b. A compound growth rate c. An aggregate production function d. The rule of law
Economic models
a. are not useful because they omit many real-world details. b. are usually composed of diagrams and equations. c. are useful because they do not omit any real-world details. d. are usually plastic representations of the economy.
The process by which new ideas spread from the original company to other businesses in the economy is called
A. innovative revolution. B. patent dispersion. C. technological diffusion. D. Moore's process.
If the average level of nominal income in a nation is $45,000 and the price level index is 180, the average real income would be about:
A. $25,000. B. $20,000. C. $30,000. D. $15,000.