One advantage of the Herfindahl index over the concentration ratio is that the:
A. Herfindahl index ignores the small firms that always exist on the fringes of any industry.
B. concentration ratio excludes the largest firms in an industry.
C. Herfindahl index is easier to compute.
D. Herfindahl index takes into account all firms in an industry.
Answer: D
You might also like to view...
Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The table below describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day.Employee-HoursPer DayOutputPer Day0014048091201516023200When the firm uses 9 employee-hours, its total cost each day is:
A. $126 B. $56 C. $176 D. $64
Suppose a new study highlights the health benefits of eating bacon. At the same time, suppose the cost of producing bacon falls. Given these changes, you should expect to see:
A. an increase in both the equilibrium price and quantity of bacon. B. an increase in the equilibrium price of bacon, but it's hard to say what will happen to the equilibrium quantity. C. an increase in the equilibrium quantity of bacon, but it's hard to say what will happen to the equilibrium price. D. a decrease in the equilibrium price of bacon, but it's hard to say what will happen to the equilibrium quantity.
One reason the supply and demand model might not be appropriate to the health-care industry?
A) Consumers do not have full information. B) Providers do not know the demand for health-care services. C) Consumers do not know how to value their own health. D) The costs of finding a doctor are too low.
Research into new technologies
a. provides positive externalities because it creates knowledge others can use. b. results in negative externalities because government funding for research causes less government spending in other areas. c. is protected by patent laws, which eliminates the need for government intervention. d. should only be funded by the corporations that will receive the profits from the research.