When MC > MR, the profit maximizing firm should
A. keep production unchanged.
B. increase production.
C. decrease production.
D. shut down.
C. decrease production.
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For those workers who receive fringe benefits, such as health insurance and pensions, the additional income this results in—over and above the average hourly wage—is as much as (for some workers)
A. 10–12 percent. B. 30–40 percent. C. 51–62 percent D. 70 percent or more.
Refer to Scenario 14-2. As a result of Kristy's deposit, Bank A's excess reserves increase by
A) $2,000. B) $8,000. C) $10,000. D) $50,000.
Government can overcome the free rider problem by taxing individuals and then using the tax proceeds to provide the nonexcludable public good itself.
Answer the following statement true (T) or false (F)
The tyranny of collateral ________
A) suggests that government tax rates are too high in the United States B) gives rise to the twin problems of moral hazard and adverse selection C) implies that when a poor person has a good idea they find it difficult to acquire financing D) attributes moral hazard to excessive government regulation