A concentration ratio gives
A) the average size of the firms in an industry.
B) the total sales of four or eight of the mid-sized firms in the industry.
C) the percentage of all sales contributed by the four or eight largest firms in the industry.
D) the sales of the four largest firms in the industry divided by the sales of the eight largest firms in the industry.
Answer: C
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. The mid-point method of calculating elasticity is typically used because:
A. it is easier to calculate. B. it is universally understood by all economists. C. the negative sign can then be ignored. D. it is a consistent way to estimate the elasticity of demand between two points on a demand curve, regardless of the direction of the movement.
If marginal revenue exceeds marginal cost, profit maximizers should:
a. reduce output until they are equal. b. increase output until they are equal. c. increase output until profits are zero. d. decrease output unless profits are zero. e. maintain current output.
To be a natural monopoly, a firm must
a. control an essential natural resource input. b. be very large. c. have a continuously falling average cost curve as output rises. d. have falling average costs over a substantial range of total market demand.
Based on the simplified trade relations assumed in the textbook, if two countries specialize according to comparative advantage, and trade according to mutually satisfactory terms of trade, then each country's consumption-possibilities frontier will shift inward relative to autarky
Indicate whether the statement is true or false