If a four-firm concentration ratio in an industry equals 75 percent, this implies that
a. 75 percent of all profits in the industry accrue to the leading four firms
b. 25 percent of sales in the industry are accounted for by the four leading firms
c. the four firms represent 75 percent of all the firms in the industry
d. the four firms represent 25 percent of all the firms in the industry
e. 75 percent of all sales in the industry are accounted for by the four leading firms
E
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Because borrowers, once they have a loan, are more likely to invest in high-risk investment projects, banks face the
A) adverse selection problem. B) lemon problem. C) adverse credit risk problem. D) moral hazard problem.
General equilibrium analysis
A. concerns competitive equilibrium only in the factor markets. B. concerns competitive equilibrium only in the product markets. C. concerns competitive equilibrium in a single market, considered in isolation. D. is the study of competitive equilibrium in many markets at the same time.
Which of the following correctly describes the national debt?
a. The excess of annual federal expenditures over annual federal tax revenues. b. Annual federal expenditures less annual federal tax revenues plus foreign U.S. bonds purchases. c. The total amount of money owed by the federal government. d. None of the above.
If goods A and B are complements, and if the price of good B rises, how will this affect the market equilibrium for good A?
a. Price and quantity will both fall. b. Price will rise and quantity will fall. c. Price and quantity will both rise. d. Price will fall and quantity will rise.