Competition between banks
A) encourages greater risk taking.
B) encourages conservative bank management.
C) increases bank profitability.
D) eliminates the need for government regulation.
A
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Which of the following gives rise to a negative externality?
A) Sudden increase in the price of wheat due to a fall in supply B) Sudden increase in the demand for diamonds leading to an increase in their price C) Deforestation leading to the extinction of many species D) Globalization leading to creation of many new job opportunities
The opportunity cost of an activity means the:
a. amount of money the activity costs. b. number of hours that is required to engage in this activity. c. expected gains by engaging in the activity. d. amount of other things that must be sacrificed in order to engage in the activity. e. expected gains minus the expected costs of engaging in the activity.
Monopolies are inefficient because they (i) eliminate barriers to entry. (ii) price their product at a level where marginal revenue exceeds marginal cost. (iii) restrict output below the socially efficient level of production
a. (i) and (ii) only b. (ii) and (iii) only c. (iii) only d. (i), (ii), and (iii)
Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?
A. An increase in supply. B. A decrease in supply. C. A decrease in demand. D. An increase in demand.