Biology Forums - Study Force

Whenever any firms in a concentrated industry merge, the Herfindahl-Hirschman Index:
 a. will rise.
 b. may rise or stay the same.
  c. may rise or fall.
 d. will fall.

QUESTION 2

Which of the following theories states that people who are highly risk-averse are less likely to engage in high-risk activities?
 a. The theory of moral hazard
  b. The theory of adverse selection
  c. The propitious selection theory
  d. The death spiral theory

QUESTION 3

The CEO and stockholders talk almost everyday.
  Indicate whether the statement is true or false

QUESTION 4

Whenever any firms in a concentrated industry merge, the four firm concentration ratio:
 a. will rise.
 b. may rise or stay the same.
  c. may rise or fall.
 d. will fall.

QUESTION 5

According to the theory of propitious selection:
 a. risk-neutral people are more likely to opt for insurance coverage.
  b. risk-averse people are more likely to opt for insurance coverage.
  c. high-risk people submit large claims for insurance coverage.
  d. high-risk people submit smaller claims for insurance coverage.

QUESTION 6

Supply chain is the entire vertical process of a firm.
  Indicate whether the statement is true or false

QUESTION 7

If the four firms in an industry represented 40, 30, 20, and 10 of the market, respectively, what would be the Herfindahl-Hirschman Index for this industry? What if the largest firm then divested into two equal sized companies?
 a. 3,000 . 2,300.
  b. 2,300; 3,000
  c. 3,000 . 5,400
  d. 2,300; 5,400

QUESTION 8

Adverse selection can occur if:
 a. high-risk persons insure themselves more heavily than low-risk persons.
  b. high-risk persons claim coverage which cannot be borne by the insurers.
  c. high-risk persons do not conceal information from the insurer.
  d. high-risk persons make an effort to take less risk in the presence of an insurance cover.

Content hidden