The Herfindahl-Hirschman Index is
A. calculated as the sum of the market shares for all firms in the industry.
B. calculated as the sum of the market shares of the top four firms.
C. calculated by summing the squared market share percentages for all firms in the industry.
D. not used by the government in considering mergers.
Answer: C
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When a firm’s AC eventually starts to rise, it is often because
A. executive salaries rise sharply as output rises. B. the ability to manage larger and larger levels of output results in much higher administrative costs. C. marginal cost increases rapidly at higher output levels. D. firm output has started to decline.
An example of a commitment device would be:
A. a swear jar that you and your friends agree must be paid $5 each time someone swears. B. putting a note on the cookie jar that you want to lose weight. C. buying yourself an ice cream after going to the gym. D. All of these are examples of commitment devices.
If there are many firms participating in a market, the market is either
a. an oligopoly or monopolistically competitive. b. perfectly competitive or monopolistically competitive. c. an oligopoly or perfectly competitive. d. an oligopoly or a cartel.
Foreign portfolio investment is sometimes called hot money because:
A. it is often invested in the assets which yield the highest returns in the world. B. earnings often go untaxed by the home government. C. it can be withdrawn from a country very quickly. D. it is very difficult to trace.