Suppose there are 100 firms of equal size currently sharing the market for peanut butter. If 12 of these firms merge, how much will the Herfindahl-Hirschman Index change?
a. increase by 144
b. decrease by 144
c. increase by 132
d. decrease by 132
e. increase by 232
C
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Tax revenue is greater the more price elastic the demand curve
Indicate whether the statement is true or false
The city of Burgersville has 100 restaurants specializing in hamburgers. Each one tries to do its own special take on the hamburger, as well as having its own decorative and advertising styles. This ______________ creates monopolistic competition.
a. distinctiveness b. similarity c. imperfectly competitive market d. perfectly competitive market
Which of the following most accurately states the economic significance of exchange?
a. Physical goods have value because they exist; exchange can neither increase nor decrease their value. b. Exchange creates value by permitting trading partners to expand total output as the result of specialization in areas where they have a comparative advantage. c. Exchange creates value by moving goods from people who value the goods less to people who value the goods more. d. Both b and c are true.
Capital income includes:
A. wages and salaries. B. earnings of the self-employed. C. profits, rent, and interest. D. capital gains from stock sales.