A market has ten firms, whose market shares are given in the table above
a) If firms I and J wanted to merge, according to the Department of Justice guidelines, would the Department of Justice challenge the merger? b) If firms A and B wanted to merge, according to the Department of Justice guidelines, would the Department of Justice challenge the merger?
a) The decision whether to challenge the merger depends, in part, on the market's Herfindahl-Hirschman Index (HHI). The HHI for the market initially is 1,150. Thus the Department of Justice guidelines say it will challenge a merger if the merger raises the HHI by 100 or more points. If firms I and J merge, the HHI becomes 1,200. The Department of Justice will not challenge this merger.
b) If firms A and B merge, the HHI becomes 1,600. The Department of Justice will challenge this merger.
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Currency includes
A) paper money and coins. B) paper money, coins, and checks. C) paper money and checks. D) paper money, coins, checks, and savings deposits.
Lagging variables are aggregate economic variables that
A) reach a peak after leading variables but before coincident variables reach a peak. B) reach a peak after coincident variables reach a peak. C) reach a peak two or more years after aggregate economic activity reaches a peak. D) are insensitive to business cycles.
Devaluation of a domestic currency
a. is also called revaluation b. refers to an increase in a floating exchange rate c. refers to a decrease in a floating exchange rate d. refers to an increase in a fixed exchange rate e. refers to a decrease in a fixed exchange rate
Relative to a situation in which gasoline is not taxed, the imposition of a tax on gasoline causes the quantity of gasoline demanded to
a. decrease and the quantity of gasoline supplied to decrease. b. decrease and the quantity of gasoline supplied to increase. c. increase and the quantity of gasoline supplied to decrease. d. increase and the quantity of gasoline supplied to increase.