Which of the following statements about the Herfindahl-Hirschman Index is CORRECT?
I. It is the square of the percentage market share of each firm summed over the largest 50 firms (or summed over all the firms if there are fewer than 50 ) in a market.
II. A small index is indicative of a high degree of competition.
III. The index is used to measure the degree of competition.
A) I only
B) I, II only
C) I, III only
D) I, II, and III
D
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A production function defines the output that can be produced
A) at the lowest cost, given the inputs available. B) for the average firm. C) if the firm is technically efficient. D) in a given time period if no additional inputs are hired. E) as technology changes over time.
The opportunity cost of investing in a new lithotripter (a machine that pulverizes kidney stones with sound waves) is
a. defined by the dollar cost of the equipment. b. the same for every health care provider. c. measured by the difference between the expected revenues from selling the services of the lithotripter and the invoice cost of the machine. d. defined by the next best use of the money invested in the equipment. e. impossible to calculate.
Suppose the federal government passes laws that require banks to disclose the advantages of having their customers use automatic bill paying (an example of a RECAP policy). This would be an example of a:
A. shadow price. B. nudge. C. flawed assumption. D. push.
Marginal cost pricing in competitive markets results in all but which one of the following?
A. Maximization of consumer utility. B. An efficient mix of goods and services being produced. C. Output being produced where price equals the opportunity cost of the last unit being produced. D. The information necessary for consumers to make rational choices between alternative goods and services.