which type of returns to specialization happen when additional units of resources are required to produce each additional unit
What will be an ideal response?
diminishing
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A commercial bank's reserves are
A) bonds issued by the U.S. government that are very safe. B) the provision of funds to businesses and individuals. C) currency in its vault plus the balance on its reserve account at a Federal Reserve Bank. D) savings and time deposits. E) its loans.
At the level of output where the marginal cost and marginal revenue curves intersect, a monopolist's demand curve passes above its average total cost curve. The firm will:
a. be able to make a pure economic profit. b. stay in operation in the short-run, but shut down. c. shut down in the short-run. d. increase its price.
Personal consumption spending is the most sensitive component of aggregate demand to monetary policy
a. True b. False Indicate whether the statement is true or false
Consider the following entry game: Here, firm B is an existing firm in the market, and firm A is a potential entrant. Firm A must decide whether to enter the market (play "enter") or stay out of the market (play "not enter"). If firm A decides to enter the market, firm B must decide whether to engage in a price war (play "hard"), or not (play "soft"). By playing "hard," firm B ensures that firm A makes a loss of $1 million, but firm B only makes $1 million in profits. On the other hand, if firm B plays "soft," the new entrant takes half of the market, and each firm earns profits of $5 million. If firm A stays out, it earns zero while firm B earns $10 million. Which of the following are perfect equilibrium strategies?
A. (not enter, soft) B. (not enter, hard) C. (enter, hard) D. (enter, soft)