An Industry Has a Single Firm and Is Found to Have

question 157

Multiple Choice

An industry has a single firm and is found to have violated antitrust laws. The government breaks it up into two firms that will share the market equally. The Herfindahl index for this industry would change from

• A) 100 to 50.
• B) 10,000 to 2,500.
• C) 100,000 to 50,000.
• D) 10,000 to 5,000.

Evaluate the implications of changes in risk aversion on insurance markets and premiums.

Distinguish between the demanders and suppliers of insurance based on their attitudes towards risk.

Recognize the role of signaling, screening, and reputation in mitigating problems associated with asymmetric information.

Identify how warranties and insurance policies can affect consumer utility and economic outcomes.

---

Definitions:

Self-Characterization Sketch

A narrative or descriptive account that an individual provides about themselves, often highlighting personal traits, ambitions, and self-perception.

Repertory Grid

A technique used in personal construct psychology to assess and evaluate an individual's way of construing or understanding the world and people around them.

Corollaries

Propositions that follow from and are often appended to a theorem or proposition that has already been proven.

Role Construct Repertory

A psychological tool used to help individuals identify how they construe significant persons in their lives, revealing their personal construct systems.