Exam 10: Organizing Production

An advantage of the corporate form of organization is that

-The above table shows the percent of sales held by the four largest firms in an industry. a) Calculate this industry's four-firm concentration ratio. b) Is this industry competitive? c) What market type does it most likely represent?

The minimum value of the Herfindahl-Hirschman Index is

During the twentieth century, the market structure of the U.S. economy has

Technological efficiency occurs when the firm produces a given output

What is the difference between a four-firm concentration ratio and a Herfindahl-Hirschman Index?

A student wrote: "Monopolistic competition is a market structure in which a small number of firms compete by making an identical product." If you were the instructor, how would you correct this statement?

The most important goal of the firm is to

High concentration measures will understate the extent of competition in a market if

An electrician quits her current job, which pays $40,000 per year. She can take a job with another firm for $45,000 per year or work for herself. The opportunity cost of working for herself is

If instead of working on his own as a consultant making $25,000, Joe takes a job at a bank, the $25,000 is

Although a corporation is the most common type of firm, corporations generate only a small share of business revenue in the U.S. economy.

-The above table gives techniques that Fatz Confectionery can use to produce 2,000 pounds of candy. Which technique is technology inefficient?

Ed is a freelance writer who could work for a newspaper at $25,000 a year but instead works for himself for $41,000 a year. His only business expenses are $1,000 for writing materials and $12,000 for rent. Ed's normal profit is $1,000. Ed's economic profit from working as a freelance writer is

Professor Rush decides to quit teaching economics and opens a shoe store out at the mall. He gave up an annual income of $50,000 to open the store. A year after opening the shoe store, the total revenue for the year was $200,000. Rush's expenses were $30,000 for labor, rent was $18,000, and utilities were $1,200. He also had to purchase new shoes from manufacturers, at a cost of $60,000, which was financed by cashing in his savings of $60,000 that had been in a bank earning 8 percent per year. The normal profit from operating a shoe store in the mall is $20,000. Determine Professor Rush's total cost and economic profit.

What is the difference between a normal profit and an economic profit?

The four-firm concentration ratio is the percentage of the ________ accounted for by ________ in an industry.

What is the Herfindahl-Hirschman Index and what does it measure?

Techniques that produce 100 sweaters -Using the data in the above table, if the price of an hour of labor is $10 and the price of a unit of capital is $20, then the most economically efficient technique for producing 100 sweaters is

Which of the following indicates a high degree of competition?