Finding anticompetitive behavior, Calculating HHI and difference b/w absolute and comparative advantage.
1. Identify the type of anticompetitive behavior illustrated by each of the following: (also note the piece of legislation that declares this type of behavior as [potentially] illegal).
a. The same individual serves on the boards of directors of GM and Ford.
b. Textbook publishers that bid on contracts collude to artificially inflate the prices of books sold to students.
c. A large retailer sells its product below cost in an effort to drive out competitors.
d. De Anza College requires the buyers of season tickets for basketball games to buy season tickets to football games too.
2. Calculate the Herfindahl-Hirschman (HHl) index for the following industry:
a.Five firms with market shares of: 60%; 15%; 10%; 10%; and 5%,
b.Using the HHI, in what case(s) would the Justice Department likely challenge a pending merger?
c.Assuming that the industry post merger HHI falls between 1000 and 1800, would the government Likely challenge a merger where a firm with 20% share is attempting to acquire a firm with a 5% share?
3. Illustrate what is the difference among absolute also comparative advantage? And, will a country always be an exporter of a good where it has an absolute advantage in production?
4.Let's say you are planning a trip to Canada. In the meantime, the US dollar appreciates (Or strengthens) relative to the Canadian dollar. Are you pleased with such a development or annoyed Explain.