Bob's Lawn Care Services is a perfectly competitive firm that currently mows 22 lawns a week. Bob's marginal cost exceeds the price he charges. Bob can increase his profit if he
A) charges a higher price.
B) charges a lower price.
C) mows fewer than 22 lawns a week.
D) mows more than 22 lawns a week.
C
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Dollar bills in the modern economy serve as money because
A) they can be redeemed for gold by the Federal Reserve. B) they are backed by the gold stored in Fort Knox. C) they have value as a commodity independent of their use as money. D) people have confidence that others will accept them as money.
Explain the economic idea that "people respond to incentives."
What will be an ideal response?
Craft unions attempt to increase wages in their profession by
a. increasing labor demand b. decreasing labor demand c. decreasing labor supply d. increasing labor supply e. exclusive dealing contracts
Assuming all excess reserves are loaned out, currency holdings by the public are zero, and a reserve ratio of 20 percent, an initial deposit of $850 will lead to total deposits of:
A. $425. B. $850. C. $4,250. D. $42,500.