The four largest firms in an industry account for the following value of industry revenues: 12 percent, 8 percent, 5 percent and 4 percent. Calculate the four-firm concentration ratio. Would this industry be regarded as competitive or concentrated?
What will be an ideal response?
The four-firm concentration ratio is 29 percent. The four-firm concentration ratio is less than 40 percent, so the industry would be regarded as competitive.
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The Coase theorem applies to cases where _____
a. transactions costs are high b. transactions costs are obvious c. transactions costs are zero d. transactions costs are difficult to figure out
With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers:
A. then the policy was effective since consumers gained in surplus overall.
B. then the policy was ineffective since consumers gained in surplus overall.
C. then the policy was ineffective since consumers lost surplus overall.
D. then the policy was effective since consumers lost surplus overall.
When marginal cost is rising, average total cost is rising
Indicate whether the statement is true or false
The ultimatum game reveals that
a. it does not make sense to try to maximize profits. b. people may have an innate sense of fairness that economic theory does not capture. c. offering someone a wildly unfair outcome is usually ok since people tend to make decisions using a "something is better than nothing" philosophy. d. Both a and b.