The four largest firms in an industry account for the following value of industry sales: 12 percent, 8 percent, 5 percent and 4 percent. Calculate the four-firm concentration ratio. Would this industry be regarded as competitive or concentrated?
What will be an ideal response?
The four-firm concentration ratio is 29 percent. The four-firm concentration ratio is less than 40 percent, so the industry would be regarded as competitive.
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If one country has the ability to produce all goods and services more efficiently than any other country, then:
A) there is no benefit to be derived from trading. B) there is still benefit to trading because the advantages to trade depend on comparative advantage and not on an absolute ability to produce more efficiently. C) it should not trade but should isolate itself from the less productive rest of the world. D) it must be a very large country.
Since the end of World War II,
A) tariffs around the world fell substantially. B) agricultural subsidies were significantly reduced. C) most nations began to apply tariffs uniformly across all industries. D) tariffs increased in low-income countries and fell a small percentage in high-income countries.