Why would a usury law result in banks making less credit available to low-income households?
What will be an ideal response?
Without restrictions, banks would charge a higher rate to riskier borrowers. Lower-income households pose a greater risk of repayment than do higher-income households. With a usury law, a ceiling on interest rates is imposed on banks. Banks grant loans to the least risky applicants. As a result, less credit is made available to the most risky applicants, who tend to be lower-income households.
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Refer to the figure above. What does the region EFG represent?
A) Consumer surplus B) Producer surplus C) Deadweight loss D) Economic profit
Why is the profitability of firms under perfect competition different when they have non-identical cost structures in comparison to identical cost structures?
What will be an ideal response?
The system of resource allocation in the United States is a
a. pure market system b. market system with elements of tradition and command c. market system with elements of tradition, but not command d. traditional system with elements of market, but not command e. pure tradition system
The quantities of labor employers are willing and able to hire at alternative wage rates in a given time period, ceteris paribus, is the definition of labor
A. Market power. B. Demand. C. Market equilibrium. D. Supply.