ECON 5313 - Final Exam Questions with Correct Answers Latest Update 2025/2026
Which of the following integration types exploits economies of scope? - Answers horizontal
integration
Which of the following are measures of industry concentration? - Answers Four-firm
concentration ratio and HHI index
The HHI of a local market is usually ________ that of national markets. - Answers higher than
Which of the following forms of payment is NOT an incentive plan? - Answers Flat salary for a
plant manager
A frozen food company buys a fresh food company. This takeover is an example of: - Answers
horizontal integration
In order for spot checks to be effective, they must be: - Answers random in nature
Which of the following may transform an industry from oligopoly to monopolistic competition? -
Answers entry
An electronics company takes over one of its original suppliers in a merger. This is an example
of: - Answers vertical integration
When the relevant markets are local, the concentration and HHI based on figures for the entire
United States tend to: - Answers be biased downward
The ranking of industries by the four-firm concentration ratio usually, but not always, reveals the
same pattern as ranking by HHI. When a discrepancy is found it is usually due to the following: -
Answers The four-firm concentration index contains data on only the largest four firms, while
the HHI is based on data for all firms in the industry and the HHI is based on squared market
shares, while the four-firm concentration ratio is not.
An example of a job that usually involves a revenue-sharing plan would be: - Answers waiters
and waitresses, insurance agents, and car salesmen
Suppose each of the 50 states had only one gasoline station, and all stations were the same
size. The four-firm concentration ratio for the state of New York, based on the state data, is: -
Answers 1.0
A firm might choose to produce its own inputs if: - Answers long-term contracts are costly to
write.
An unregulated industry has a Lerner index of zero. These numbers: - Answers are consistent
with the industry being perfectly competitive.
Spot exchange can be inefficient in the presence of: - Answers opportunism
Which of the following integration types exploits economies of scope? - Answers horizontal
integration
Which of the following are measures of industry concentration? - Answers Four-firm
concentration ratio and HHI index
The HHI of a local market is usually ________ that of national markets. - Answers higher than
Which of the following forms of payment is NOT an incentive plan? - Answers Flat salary for a
plant manager
A frozen food company buys a fresh food company. This takeover is an example of: - Answers
horizontal integration
In order for spot checks to be effective, they must be: - Answers random in nature
Which of the following may transform an industry from oligopoly to monopolistic competition? -
Answers entry
An electronics company takes over one of its original suppliers in a merger. This is an example
of: - Answers vertical integration
When the relevant markets are local, the concentration and HHI based on figures for the entire
United States tend to: - Answers be biased downward
The ranking of industries by the four-firm concentration ratio usually, but not always, reveals the
same pattern as ranking by HHI. When a discrepancy is found it is usually due to the following: -
Answers The four-firm concentration index contains data on only the largest four firms, while
the HHI is based on data for all firms in the industry and the HHI is based on squared market
shares, while the four-firm concentration ratio is not.
An example of a job that usually involves a revenue-sharing plan would be: - Answers waiters
and waitresses, insurance agents, and car salesmen
Suppose each of the 50 states had only one gasoline station, and all stations were the same
size. The four-firm concentration ratio for the state of New York, based on the state data, is: -
Answers 1.0
A firm might choose to produce its own inputs if: - Answers long-term contracts are costly to
write.
An unregulated industry has a Lerner index of zero. These numbers: - Answers are consistent
with the industry being perfectly competitive.
Spot exchange can be inefficient in the presence of: - Answers opportunism
