Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. Hi Phi Unlimited's total revenue from installing 15 sound systems is $30,000 and its total revenue from installing 18 sound systems is $33,000. The marginal revenue received from selling the 18th sound system is
A. equal to the price of the 16th sound system.
B. greater than the price of the 16th sound system.
C. less than the price of the 16th sound system.
D. Indeterminate from the given information.
Answer: C
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If the Herfindahl-Hirschman index (HHI) among the firms in the long distance telecommunications market were equal to 1755, when would the Federal Trade Commission probably challenge a proposed merger between any two of the firms?
A) It would challenge if the HHI would increase by more than 50 points. B) It would challenge if the HHI would increase by more than 100 points. C) It would challenge no matter what happened to the HHI because the market has so few firms. D) It would not challenge because the HHI is less than 1800.
Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?
A) Firms have to hire an extra worker to change prices in its store because of inflation. B) A worker receives a raise in salary that is less than the rate of inflation, because management under-predicted inflation. C) A bank collects a lower amount of interest from a loan because inflation was under-predicted. D) A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year, and the actual rate of inflation ends up being 7 percent per year.
From 1929 to 1932, the total value of the stock market:
A. stayed the same. B. more than tripled. C. more than quadrupled. D. decreased by nearly 90 percent.
As a firm increases its output in the short run, average fixed cost
a. rises steadily b. falls and then rises c. falls steadily d. rises and then falls e. remains unchanged