Efficiency is achieved
A) when output is being produced at a point inside a production possibilities curve.
B) when producers are getting the maximum possible output from the available resources.
C) when consumers are able to buy everything that they want.
D) when prices of all goods and services go to zero.
Answer: B
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Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and demand deposits are the only form of money. A commercial bank receiving a new demand deposit of $100 would be able to extend new loans in the amount of
A. $10.
B. $90.
C. $100.
D. $1,000.
Traders in futures markets settle gains and losses each day
A) by making margin payments. B) by using settlement-by-offset. C) in a process called mark-to-market settlement. D) by making arbitrage payments.
A lack of well-established property rights is one of the key reasons why markets fail
a. True b. False Indicate whether the statement is true or false
If the demand function for city bus rides is P = 100 - 10Q and the present price of a ride is 50, then
A. raising prices will increase city revenue. B. raising prices will decrease city revenue. C. from the information given it is not clear what would happen to city revenue if price is increased. D. raising prices will not change city revenue.