What is the Herfindahl index and how is it calculated?
What will be an ideal response?
The Heyerdahl index is a way to measure market concentration that takes into account the size of market shares held by firms. It measures the sum of the squared market shares of each firm in the industry. It gives a greater weight to firms with large market shares. A high Heyerdahl index number indicates a high degree of concentration in one or two firms. A lower index might mean that the top four firms have rather equal shares of the market. For example, if there were only one firm in the industry, the Heyerdahl index would be 10,000 (100 squared). If four firms in an industry each had a 25% share, the index would be 2500 (252? 4 = 2500). A high index might be where one firm has 85% of the industry and the others have 5% each for a total of 7225 + (52? 3) = 7300.
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List the major non-price determinants of supply
What will be an ideal response?
Suppose potential income is $60 billion, actual income is $40 billion, and expenditures don't vary with income. If the actual budget deficit is $4 billion and the marginal tax rate is 20 percent, the cyclical deficit:
A. is between zero and $4 billion. B. is zero. C. is $4 billion. D. cannot be determined from the given information.
Assuming everything else stays the same, an increase in the price of laptop computers will __________ of laptop computers.
a) decrease the quantity demanded b) increase the demand c) increase the quantity demanded d) decrease the demand
In the classical model, a temporary increase in government purchases causes the new equilibrium to have
A. more employment and a lower real wage than before. B. less employment and a higher real wage than before. C. more employment and a higher real wage than before. D. less employment and a lower real wage than before.