Economic profits are earned when
A) price equals marginal cost.
B) price equals average variable costs.
C) price equals average total costs.
D) price is greater than average total costs.
D
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If the FDIC eliminated its insurance program for deposits, then
A) banks would probably hold fewer reserves. B) moral hazard would be increased. C) individual depositors would have more incentive to ascertain the soundness and solvency of the bank. D) the banking system would probably fail.
In the above figure, which of the following statements is TRUE? I. The consumer maximizes utility by consuming at point A. II. The marginal rate of substitution at point B and point A are equal because they are on the same budget line
A) only I B) only II C) both I and II D) neither I nor II
Which of the following is NOT a feature of a monopolistically competitive market?
A) numerous buyers and sellers B) differentiated products C) advertising D) a homogeneous product
A market is considered competitive if the Herfindahl-Hirschman Index (HHI) is ________ and its four-firm concentration ratio is ________
A) high; high B) high; low C) low; high D) low; low E) between 30 percent and 70 percent; greater than 5,000