When people alter their preferences when a choice is presented in a certain way, it is called:
a. anchoring
b. framing
c. the endowment effect
d. compartmentalizing
b
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The table above lists the market shares of the twenty makers of personal computers. Based upon the Herfindahl-Hirschman Index for this industry, the Justice Department would
A) regard the industry as highly concentrated. B) be against any two firms merging. C) consider the market oligopolistic. D) regard the industry as competitive.
Which of the following statements describes the presence of diminishing returns? All else equal,
a. Marginal product is constant as output increases b. Marginal product is falling as output increases c. Marginal product is rising as output increases d. Marginal product is zero
Consider an industry with 5 firms. Firm A has sales of $6 mil., firm B has sales of $12 mil., firm C has sales of $30 mil., firm D has sales of $50 mil. and firm E has sales of $2 mil. The Herfindahl-Hirschman index for this industry is
a. 3580 b. 3584 c. 2500 d. 3400 e. unknown, not enough information to tell
The idea that consumption increases at the same rate as national income so that MPC is constant, is known as the
a. absolute income hypothesis b. Keynesian income hypothesis c. relative income hypothesis d. permanent income hypothesis e. rational income hypothesis