Suppose two owners of a store agree to split the profit equally regardless of the number of hours each spends working at the store. As a result,
A) production efficiency is achieved.
B) each enjoys only half the marginal benefit of an additional hour working in the store.
C) one will work all of the time while the other works zero hours.
D) each will work as many hours as if he or she were the sole owner.
B
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When deciding whether or not to provide a public good, a government's policy should be to provide the good where society's marginal benefit is smaller than the marginal cost of the good
a. True b. False Indicate whether the statement is true or false
If a bank that desires to hold no excess reserves and has just enough reserves to meet the required reserve ratio of 15 percent receives a deposit of $600, it has a
a. $600 increase in excess reserves and no increase in required reserves. b. $600 increase in required reserves and no increase in excess reserves. c. $510 increase in excess reserves and a $90 increase in required reserves. d. $90 increase in excess reserves and a $510 increase in required reserves.
Arbitrage occurs when an entity purchases a good in the lower priced market and sells it at the same time in the highed priced market. The existance of trade costs would ___ opportunites of abitrage
a) lower b) not affect c) increase d) completly eliminate
Sally writes a $10,000 check to Harry who deposits it in the same bank.
A. Both deposits and reserves of depository institutions increase. B. Both deposits and reserves of depository institutions remain unchanged. C. Reserves at depository institutions increase, but deposits remain the same. D. Both deposits and reserves at depository institutions decrease. E. Reserves at depository institutions decrease, but deposits remain the same.