Exam 10: Organizing Production

In the personal computer (PC) market in the first half of 2008, Hewlett-Packard maintained its worldwide No. 1 ranking at a market share of 19.1 percent. Dell's market share was 16 percent and Acer held onto third place with a 9.5 percent share, and Lenovo maintained fourth place, with a 7.9 percent share. What is the Herfindahl-Hirschman Index for the firms mentioned?

If more firms enter a market that initially had 20 firms in it, then the Herfindahl-Hirschman Index will ________.

Which of the following statements about the Herfindahl-Hirschman Index is CORRECT? I. It is the square of the percentage market share of each firm summed over the largest 50 firms (or summed over all the firms if there are fewer than 50) in a market. II) A small index is indicative of a high degree of competition. III) The index is used to measure the degree of competition.

The owner of a proprietorship has ________ liability and ________ required to use all of his or her entire wealth to pay for the firm's losses.

A firm uses labor and capital. To tell if the firm is technologically efficient, you

Wanda takes $3,000 from her savings account that pays 5 percent interest per year and uses the funds to purchase a computer for $3,000 for her business. At the end of the year the computer is worth $2,000. Wanda pays an implicit rental rate of ________ a year.

Suppose that Tracy and Pat start a business. Because of a series of bad decisions by Tracy, the company goes bankrupt, owing a total of $50,000. Tracy is penniless and Pat is a millionaire. If the company were organized as a partnership, Pat would be responsible for

If a market is shared equally by 100 firms, the Herfindahl-Hirschman Index is

You have just purchased 100 shares of the stock of Microsoft Corporation. This places you in the role of

What are the four types of markets? Give a brief description of each type.

A key reason for the existence of firms is that, compared to markets, firms often achieve lower

-The table above shows sales of the firms in the chocolate industry. The four-firm concentration ratio in the industry is

Which of the following is NOT a solution to a principal-agent problem?

In their relationship with stockholders, a firm's managers act

If the four-firm concentration ratio is a very small number, then

Flora's Flower Shop bought a new van for $23,000. Today, the market price of this van is $11,000. The economic depreciation of the van is ________.

Bill is working as the only employee at a local store. The relation between Bill and the owner of the store is such that Bill is ________ and the owner is ________.

Owners of ________ have unlimited liability.

As owner of a one-third share of a partnership, Josh is legally liable for

When Fatz confectionery can lower the cost of manufacturing and packaging a pound of candy by doubling the quantity manufactured and packaged each day, it will achieve