A bank can safely lend only an amount equal to its excess reserves because
A) all of its reserves are now required reserves.
B) borrowers will spend the proceeds of their loans, and the bank will lose all of its excess reserves.
C) the excess reserves will fall to zero when the bank makes the loans.
D) This is not true since a bank can safely lend an amount equal to its total reserves.
B
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When first-degree price discrimination is perfectly implemented
a. social gain is maximized, with all gains going to the monopoly. b. consumers' surplus and producer's surplus are both larger than in the case of simple monopoly. c. the resulting deadweight loss is larger than if the monopoly did not price discriminate. d. the consumers' and producer's gains from trade are identical to those in a competitive market.
The gains from consumer surplus and producer surplus occur when
A) both consumers and producers engage in voluntary exchange. B) consumers are willing to buy a good but producers are not willing to provide it. C) producers are willing to provide a good but consumers are not willing to pay for it. D) the government supplies the good instead of firms.
The higher the level of output, the farther ________ the isoquant will lie.
A. down and to the right B. up and to the left C. up and to the right D. down and to the left
It is usually assumed that a perfectly competitive firm's supply curve is given by its marginal cost curve. In order for this to be true, which of the following additional assumptions are necessary? I. That the firm seek to maximize profits. II. That the marginal cost curve be positively sloped. III. That price exceeds average variable cost. IV. That price exceeds average total cost
a. All of the above. b. I and II but not III and IV. c. I and III but not II and IV. d. I and II only. e. I, II and III, but not IV.