The concentration and Herfindahl indices computed by the U.S. Bureau of Census must be interpreted with caution because:
A. Both they overstate the actual level of concentration in markets served by foreign firms and they understate the degree of concentration in local markets, such the gasoline market are correct.
B. they understate the degree of concentration in local markets, such the gasoline market.
C. they overstate the actual level of concentration in markets served by foreign firms.
D. None of the statements are correct.
Answer: A
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Economists use the term normal good to refer to goods that
a. you consume on a daily basis. b. you consume more of when your income falls. c. you consume more of when your income rises. d. consumers choose the same quantities of regardless of income.
Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. If Rogue's average total cost decreases as the business increases plant size, then Rogue experiences
A) economies of scale. B) diseconomies of scale. C) diminishing marginal returns. D) constant returns to scale.
If a firm's average total cost is less than price where MR = MC
A) the firm should shut down. B) the firm should cut back on its output to lower its cost. C) the firm should continue to produce the output it is producing. D) the firm should raise its price.
According to economic historians, one result of international trade is that it
A) aids in the international transmission of ideas. B) reduces the world-wide output of goods. C) reduces the world-wide consumption of goods. D) causes persistent world-wide inflation.