Under current guidelines, the U.S. Department of Justice usually challenges
a. all mergers
b. mergers in industries that would have a postmerger Herfindahl index greater than 1,800
c. mergers in industries that would have a postmerger Herfindahl index greater than 1,800 if the Herfindahl index increases by more than 100 points
d. mergers in industries that would have a postmerger Herfindahl index greater than 1,000
e. mergers in industries that would have a postmerger Herfindahl index greater than 1,000 if the Herfindahl index increases by more than 100 points
QUESTION 2A perfectly competitive firm is allocatively efficient because price is identical to marginal cost at every quantity
a. True
b. False
QUESTION 3Which of the following is not an example of De Beers Diamonds trying to increase consumer demand?
a. sending the marketing message that a diamond lasts forever
b. ads that illustrate that a diamond should remain in the family and not be sold
c. informing potential customers about how diamonds lose monetary value over time
d. introducing the idea of the diamond engagement ring
e. the spirit ring as a sign of independence
QUESTION 4The index that the U.S. government currently uses to determine whether a merger should be allowed is the
a. Herfindahl index
b. Schumpeter index
c. Dow Jones average index
d. consumer price index
e. four-firm concentration ratio
QUESTION 5Productive efficiency occurs in markets when
a. goods are produced at the lowest possible average total cost
b. goods are produced at the lowest average variable cost
c. goods are produced at the lowest marginal cost
d. goods are produced at the lowest average fixed cost
e. the economy is producing the maximum quantity of goods and services it can
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