A positive (non-zero) price for a good means there is a surplus of that good
a. True
b. False
Indicate whether the statement is true or false
False
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If the demand increases in a perfectly competitive market, firms will likely:
A. experience a loss due to increased competition. B. set prices artificially higher permanently. C. enter the market in hopes of capturing some profits. D. have to engage in more advertising in order to further stimulate the increase in demand.
Initially a bank has a required reserve ratio of 20 percent and no excess reserves. If $5,000 is deposited into the bank, then initially, ceteris paribus,
A. Required reserves will increase by $5,000. B. This bank can increase its loans by $5,000. C. This bank can increase its loans by $4,000. D. Total reserves will increase by $4,000.
James earns a degree from a top university and is hired by a prominent firm because executives at the firm believe that graduates of this university must have a high ability level or they would not have graduated. Which of the following theories of education do the executives believe?
a. signaling theory b. human-capital theory c. compensating-differentials theory d. All of the above are correct.
What will a price ceiling that is non-binding do?
a) It will cause a surplus in the market. b) It will cause a shortage in the market. c) It will cause the market to be less efficient. d) It will have no effect on the market price.