The reason that a run on a single bank can turn into a bank panic that threatens the entire financial system is:
A. the lack of regulation.
B. information asymmetries.
C. moral hazard.
D. the increased reliance on web-based funds transfers.
Answer: B
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Refer to Horizontal Merger. After the merger, producer's surplus is equal to
The following questions refer to the accompanying diagram, which shows the effects of a horizontal merger. Before the merger, the firm behaves competitively producing Q0 and charging P0. The merger lowers the firm's marginal cost and gives the firm enough market power to switch to the monopoly equilibrium.
a. area A + C + F.
b. area C + D + F + G.
c. area C + D + E - F - G.
d. area C + D.
"Competition is the great regulator." This statement reflects that
A) when competition is present, businesses have a strong incentive to serve the general public and therefore there is little need for regulation of competitive markets. B) government regulation is the key ingredient of competitive markets and therefore markets cannot be competitive without regulation. C) when markets are regulated by the government, there is no need for competition among business firms. D) extensive regulation is needed to assure that businesses will treat consumers properly and serve the interests of the general public.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.
In which of the following market structures do you find only one seller?
A. a monopoly B. a oligopoly C. a monopolistic competition D. a perfectly competitive market