Question 1

The Dansby-Willig Index measures the potential for a change in social welfare by examining the affect of changes in industry

Accepted Answer

A) production cost. 
B) output. 
C) revenue. 
D) profit. 
A) production cost. 
B) output. 
C) revenue. 
D) profit.

Question 2

Which of the following is NOT considered a measure of firm conduct?

Accepted Answer

A) Lerner index of pricing behavior. 
B) Research and development measures. 
C) Advertising measures. 
D) Dansby-Willig index. 
A) Lerner index of pricing behavior. 
B) Research and development measures. 
C) Advertising measures. 
D) Dansby-Willig index.

Question 3

As a general rule of thumb, The U.S.Department of Justice views industries to be highly concentrated if the Herfindahl index is

Accepted Answer

A) above 1,000. 
B) below 1,000. 
C) above 1,800. 
D) below 1,800. 
A) above 1,000. 
B) below 1,000. 
C) above 1,800. 
D) below 1,800.

Question 4

An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600, respectively.According to the general rule of thumb, the HHI of this industry implies that the market structure is:

Accepted Answer

A) competitive. 
B) non-competitive. 
C) non-inclusive. 
D) monopoly. 
A) competitive. 
B) non-competitive. 
C) non-inclusive. 
D) monopoly.

Question 5

The Lerner index in the paper industry is 0.58.Based on this information, a firm charging $3.25 per ream of paper should have a marginal cost of

Accepted Answer

A) $0. 
B) $1.365. 
C) $1.885. 
D) $3.25. 
A) $0. 
B) $1.365. 
C) $1.885. 
D) $3.25.

Question 6

C4 and HHI tend to ____________ the concentration in a domestic industry.

Accepted Answer

A) provide different rankings of. 
B) understate. 
C) overstate. 
D) understate or overstate, depending on the true geographic market. 
A) provide different rankings of. 
B) understate. 
C) overstate. 
D) understate or overstate, depending on the true geographic market.

Question 7

The industry elasticity of demand for good Y is -3, while the elasticity of demand for an individual manufacturer's of good Y is -12.Based on the Rothschild approach to measuring market power, we conclude that

Accepted Answer

A) 4, indicating there is significant monopoly power in this industry. 
B) 1/4, indicating there is little monopoly power in this industry. 
C) 4, indicating there is little monopoly power in this industry. 
D) none of the statements associated with this question are correct. 
A) 4, indicating there is significant monopoly power in this industry. 
B) 1/4, indicating there is little monopoly power in this industry. 
C) 4, indicating there is little monopoly power in this industry. 
D) none of the statements associated with this question are correct.

Question 8

An industry consists of eight firms with annual sales (in millions) of $200, $300, $900, $600, $300, $700, $500, and $600, respectively.What is the industry's C4?

Accepted Answer

A) 0.49. 
B) 0.62. 
C) 0.66. 
D) 0.77. 
A) 0.49. 
B) 0.62. 
C) 0.66. 
D) 0.77.

Question 9

Which of the following may transform an industry from oligopoly to monopolistic competition?

Accepted Answer

A) Entry of new firms. 
B) Significant vertical integration. 
C) Exit of firms. 
D) A series of horizontal mergers. 
A) Entry of new firms. 
B) Significant vertical integration. 
C) Exit of firms. 
D) A series of horizontal mergers.

Question 10

Suppose that there are two industries, A and B.There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively.There are 4-firms in industry B with equal sales of $2.5 million for each firm.The HHI for industry B is:

Accepted Answer

A) 2,500. 
B) 1,800. 
C) 3,200. 
D) 2,800. 
A) 2,500. 
B) 1,800. 
C) 3,200. 
D) 2,800.

Question 11

An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600, respectively.What is the industry's C4?

Accepted Answer

A) 0.58. 
B) 0.62. 
C) 0.74. 
D) 0.77. 
A) 0.58. 
B) 0.62. 
C) 0.74. 
D) 0.77.

Question 12

Which of the following measures market power?

Accepted Answer

A) Lerner Index. 
B) Herfindahl-Hirschman Index. 
C) Rothchild Index. 
D) Lerner Index and Rothchild Index. 
A) Lerner Index. 
B) Herfindahl-Hirschman Index. 
C) Rothchild Index. 
D) Lerner Index and Rothchild Index.

Question 13

Some firms find conglomerate mergers advantageous since it permits firms to

Accepted Answer

A) take advantage of economies of scope. 
B) take advantage of economies of scale. 
C) cash flow resulting from products with low- and high-periods. 
D) reduce input costs. 
A) take advantage of economies of scope. 
B) take advantage of economies of scale. 
C) cash flow resulting from products with low- and high-periods. 
D) reduce input costs.

Question 14

The industry elasticity of demand for telephone service is -2 while the elasticity of demand for a specific phone company is -5.What is the Rothchild index?

Accepted Answer

A) 0.2. 
B) 0.4. 
C) 0.5. 
D) 0.7. 
A) 0.2. 
B) 0.4. 
C) 0.5. 
D) 0.7.

Question 15

The causal view of the industry believes that:

Accepted Answer

A) market structure causes firms to behave in a certain way. 
B) market performance causes firms to have a certain structure. 
C) market performance causes firms to behave in a certain way. 
D) behavior causes firms to have a certain structure. 
A) market structure causes firms to behave in a certain way. 
B) market performance causes firms to have a certain structure. 
C) market performance causes firms to behave in a certain way. 
D) behavior causes firms to have a certain structure.

Question 16

The concentration and HHI reported in the U.S.Bureau of Census must be interpreted with caution since:

Accepted Answer

A) They are calculated by excluding foreign imports hence bias upward the degree of concentration. 
B) They are based on figures for the entire national market. 
C) The definition of product classes used to define an industry affects the results. 
D) All of the statements associated with this question are correct. 
A) They are calculated by excluding foreign imports hence bias upward the degree of concentration. 
B) They are based on figures for the entire national market. 
C) The definition of product classes used to define an industry affects the results. 
D) All of the statements associated with this question are correct.

Question 17

Which of the following integration types has the potential problem of increasing the firm's market power?

Accepted Answer

A) Vertical integration. 
B) Horizontal integration. 
C) Cointegration. 
D) Conglomerate integration. 
A) Vertical integration. 
B) Horizontal integration. 
C) Cointegration. 
D) Conglomerate integration.

Question 18

An industry consists of three firms with equal annual sales.What is the industry's C4?

Accepted Answer

A) 0.58. 
B) 0.75. 
C) 1.00. 
D) There is not sufficient information to compute the industry C4. 
A) 0.58. 
B) 0.75. 
C) 1.00. 
D) There is not sufficient information to compute the industry C4.

Question 19

In a perfectly competitive market that is operating at maximum efficiency, the Dansby-Willig index would be

Accepted Answer

A) zero. 
B) 0.25. 
C) 0.50. 
D) 1.00. 
A) zero. 
B) 0.25. 
C) 0.50. 
D) 1.00.

Question 20

Monopolistic competition is characterized by

Accepted Answer

A) employing labor from a perfectly competitive labor market. 
B) Rothschild indices that are close to zero. 
C) concentration ratios that are well above zero. 
D) differentiated products. 
A) employing labor from a perfectly competitive labor market. 
B) Rothschild indices that are close to zero. 
C) concentration ratios that are well above zero. 
D) differentiated products.

The Dansby-Willig Index measures the potential for a change in social welfare by examining the affect of changes in industry

Which of the following is NOT considered a measure of firm conduct?

As a general rule of thumb, The U.S.Department of Justice views industries to be highly concentrated if the Herfindahl index is

An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600, respectively.According to the general rule of thumb, the HHI of this industry implies that the market structure is:

The Lerner index in the paper industry is 0.58.Based on this information, a firm charging $3.25 per ream of paper should have a marginal cost of

C₄ and HHI tend to ____________ the concentration in a domestic industry.

The industry elasticity of demand for good Y is -3, while the elasticity of demand for an individual manufacturer's of good Y is -12.Based on the Rothschild approach to measuring market power, we conclude that

An industry consists of eight firms with annual sales (in millions) of $200, $300, $900, $600, $300, $700, $500, and $600, respectively.What is the industry's C₄?

Which of the following may transform an industry from oligopoly to monopolistic competition?

Suppose that there are two industries, A and B.There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively.There are 4-firms in industry B with equal sales of $2.5 million for each firm.The HHI for industry B is:

An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600, respectively.What is the industry's C₄?

Which of the following measures market power?

Some firms find conglomerate mergers advantageous since it permits firms to

The industry elasticity of demand for telephone service is -2 while the elasticity of demand for a specific phone company is -5.What is the Rothchild index?

The causal view of the industry believes that:

The concentration and HHI reported in the U.S.Bureau of Census must be interpreted with caution since:

Which of the following integration types has the potential problem of increasing the firm's market power?

An industry consists of three firms with equal annual sales.What is the industry's C₄?

In a perfectly competitive market that is operating at maximum efficiency, the Dansby-Willig index would be

Monopolistic competition is characterized by

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Exam 7: The Nature of Industry

The Dansby-Willig Index measures the potential for a change in social welfare by examining the affect of changes in industry

Which of the following is NOT considered a measure of firm conduct?

As a general rule of thumb, The U.S.Department of Justice views industries to be highly concentrated if the Herfindahl index is

An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600, respectively.According to the general rule of thumb, the HHI of this industry implies that the market structure is:

The Lerner index in the paper industry is 0.58.Based on this information, a firm charging $3.25 per ream of paper should have a marginal cost of

C4 and HHI tend to ____________ the concentration in a domestic industry.

The industry elasticity of demand for good Y is -3, while the elasticity of demand for an individual manufacturer's of good Y is -12.Based on the Rothschild approach to measuring market power, we conclude that

An industry consists of eight firms with annual sales (in millions) of $200, $300, $900, $600, $300, $700, $500, and $600, respectively.What is the industry's C4?

Which of the following may transform an industry from oligopoly to monopolistic competition?

Suppose that there are two industries, A and B.There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively.There are 4-firms in industry B with equal sales of $2.5 million for each firm.The HHI for industry B is:

An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600, respectively.What is the industry's C4?

Which of the following measures market power?

Some firms find conglomerate mergers advantageous since it permits firms to

The industry elasticity of demand for telephone service is -2 while the elasticity of demand for a specific phone company is -5.What is the Rothchild index?

The causal view of the industry believes that:

The concentration and HHI reported in the U.S.Bureau of Census must be interpreted with caution since:

Which of the following integration types has the potential problem of increasing the firm's market power?

An industry consists of three firms with equal annual sales.What is the industry's C4?

In a perfectly competitive market that is operating at maximum efficiency, the Dansby-Willig index would be

Monopolistic competition is characterized by

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

C₄ and HHI tend to ____________ the concentration in a domestic industry.

An industry consists of eight firms with annual sales (in millions) of $200, $300, $900, $600, $300, $700, $500, and $600, respectively.What is the industry's C₄?

An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600, respectively.What is the industry's C₄?

An industry consists of three firms with equal annual sales.What is the industry's C₄?