Consider an industry consisting of four firms with market shares of 30 percent, 25 percent, 25 percent, and 20 percent. Calculate the Herfindahl Hirschman Index and interpret your result
HHI = (302 + 252 + 252 + 202) = 2,550.
The industry is considered to be highly concentrated as the HHI number exceeds 1,800.
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Suppose the United Automobile Workers union agrees to accept lower wages for members if the automobile manufacturers lower their prices to buyers
Will the UAW's measures usually result in a larger number of cars being sold and hence more jobs for UAW members? A) No, because people only buy new cars when they need them. B) Not if the price elasticity of demand for new cars turns out to be less than one. C) Only in the unlikely event the demand for new cars is unit elastic. D) Probably not, because new car sales depend on advertising. E) Yes.
The primary mission of the World Bank today is to
A) provide capital to underdeveloped countries. B) provide capital to firms around the world. C) provide financial assistance for the reconstruction of war-damaged nations. D) provide a safe place for people around the world to put their money. E) help countries manage their exchange rates.