Firms with market power must decide all of the following except
A. how to produce it.
B. how much to supply in each input market.
C. what price to charge for their output.
D. how much to produce.
Answer: B
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If the U.S. government sells bonds to fund improvements in infrastructure, and the bonds are bought by foreigners, the burden on future U.S. taxpayers
A) is not increased so long as the return on the improvements is at or above the borrowing cost. B) is not increased so long as the return on the improvements is below the borrowing cost. C) is not increased so long as the return on the improvements is above zero. D) is increased regardless of the borrowing cost and the return on the improvements.
How are the insurance premiums determined for deposit insurance?
a. The insurance premium is based on the bank’s level of deposits and then adjusted according to the riskiness of a bank’s financial situation. b. The insurance premium is based on the bank’s level of riskiness and then adjusted according to the bank’s level of deposits. c. The insurance premium is based on the bank’s level of deposits and then adjusted according to the riskiness of the overall U.S. banking system's financial situation. d. The insurance premium is based on the bank’s level of riskiness and then adjusted according to the level of deposits of the overall U.S. banking system.
As output increases, a typical firm's unit costs
a. decrease because the firm buys its inputs in large quantities b. increase because the supply of inputs increases c. remain constant d. increase due to the increasing scarcity of resources e. decrease as firms take advantage of diseconomies of scale
The marginal revenue of a price taker is
a. equal to price. b. less than price. c. more than price. d. unrelated to price.