The government regulates bank mergers, sometimes denying the proposed merger. Often the reason given for the denial is to protect small investors. What are small investors being protected from?
A. mergers can increase the monopoly power of banks and the bank may seek to exploit this power by raising prices and earning unwarranted profits.
B. bank runs hurt larger banks more than smaller banks.
C. in order to pay for the merger, the bank may seek higher returns putting the depositors' funds at greater risk.
D. with a larger bank the bank is likely to take greater risk and may fail.
Answer: A
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The figure above shows that the deadweight loss from the government's policy is
A) about $350 million. B) about $25 million. C) about $50 million. D) about $100 million. E) zero.
When long-run average cost increases as output increases there are
A) economies of scale. B) diseconomies of scale. C) constant returns to scale. D) none of the above.
The idea that labor productivity depends on the degree of labor specialization is attributed to
a. Hiro Yakamaya b. Stanley Jevons c. J. S. Mill d. Adam Smith e. Robinson Crusoe
The law of diminishing marginal utility states that total utility will increase at a decreasing rate as additional units of a commodity are acquired
a. True b. False Indicate whether the statement is true or false