Four firms control the market for a particular good, resulting in an HHI of 6,550. Total industry sales are $1,750, and it is known that one firm has sales of $1,400 and another sales of $175. If each of the remaining two firms has the same sales, then we can conclude that the remaining two firms each have a market share of:
A. $90.
B. $200.
C. 0.20.
D. 6,550.
Answer: D
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Dan is the owner of a price-taking company that manufactures sporting goods. One particular facility Dan owns produces baseball bats and baseball gloves. His cost function for baseball bats is CB(QB, QG) = 100QB + QB2 + QBQG and the marginal cost is MCB = 100 + 2QB + QG, where QB is the output level for bats and QG is the output level for gloves. Dan's cost function for baseball gloves is CG(QB, QG) = 50QG + QG2 + QGQB, and the marginal cost is MCG = 50 + 2QG + QB. The price of a baseball bat is $240 and the price of a baseball glove is $150. If Dan were to shut down his production of bats and only produce gloves, what would be his profit-maximizing sales quantity of gloves?
A. 20 B. 25 C. 30 D. 50
Lumicia Corporation spent $2 million to purchase a new technology that would lower its manufacturing cost by 15 percent. This will enable the company to sell its output cheaper than most other competitors. This improvement in the technology of production is most likely to result in a(n): a. upward shift of its aggregate production function
b. downward shift of its aggregate production function. c. rightward movement along its aggregate production function. d. leftward movement along its aggregate production function.
If a 10 percent increase in income induced a group of consumers to reduce their yearly purchases of eggs by 5 percent, for these consumers,
a. the income elasticity of eggs equals approximately 1.05. b. the income elasticity of eggs is 0.5. c. eggs are a luxury good. d. eggs are an inferior good.
An increase in the U.S. national debt would be:
A. unsustainable if U.S. GDP grew at a faster rate than the debt. B. unsustainable under any circumstances. C. unsustainable if U.S. GDP grew at a slower rate than the debt. D. sustainable under any circumstances.