The Herfindahl index is calculated by adding the squared value of the market shares of all the firms in the industry.
Answer the following statement true (T) or false (F)
True
This is the definition of the Herfindahl index.
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The stock of high-powered money in the economy is $80 billion. The bank reserve-holding ratio is 0.12 and the public wishes to hold 10% of its deposits as cash. The money supply will be approximately
A) $363 billion assuming the 80 billion of high-powered money is held by banks. B) $400 billion assuming the 80 billion of high-powered money is held by the Fed or in bank vaults. C) $327 billion assuming the 80 billion of high-powered money is not held by the Fed or in bank vaults. D) $425 billion assuming the 80 billion of high-powered money is held by banks.
The principal difference between economic profits for a monopolist and for a competitive firm is that:
a. monopoly profits create major problems of equity whereas competitive profits do not. b. competitive profits exist only in the short run whereas monopoly profits may exist in the long run as well. c. monopoly profits represent a transfer out of consumer surplus whereas competitive profits do not. d. monopoly profits are usually larger than competitive profits.
Figure 10-7
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In Figure 10-7, output at which point represents short-run but not long-run equilibrium?
A. A only B. B only C. Both A and B D. Both B and C
In the 1980s, several ________________ countries experienced inflation rates of thousands of percent per year
a. Asian b. Southern European c. Eastern European d. Latin American e. African