MT2_review - Econ 101: Updated Midterm 2 Review All...

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Econ 101: Updated Midterm 2 Review All homework problems are important. Please go over them along with the extra problems. Answer keys for the home-works are posted on my website. I have added problem # 25 and 26 (diagrams). Try the problems on your own first. Chapter 6: 1. End of chapter 6 Problem # 20 (HW # 4) ( Important ) Chapter 7: 2. End of chapter 7 Problem # 2, 4, 15 (HW # 4) 3. A firm has a marginal cost of $20 and charges a price of $40. The Lerner index for this firm is: A. 0.20. B. 0.50. C. 0.33. D. 0.75. 4. An industry is comprised of 20 firms, each with an equal market share. What is the 4-firm concentration ratio of this industry? A. 0.2. B. 0.4. C. 0.6. D. 0.8. 5. A Lerner index of 0 suggests A. monopoly. B. monopolistic competition. C. oligopoly. D. perfect competition. 6. An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600, respectively. What is the industry's C 4 ? A. 0.58. B. 0.62. C. 0.74. D. 0.77.
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7. Suppose that there are two industries, A and B. There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively. There are 4-firms in industry B with equal sales of $2.5 million for each firm. The HHI for industry A is
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MT2_review - Econ 101: Updated Midterm 2 Review All...

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