Banking failures result when
(a) banks do not hold 100 percent of their customers' deposits in their vaults.
(b) banks make loans.
(c) bank withdrawals exceed their reserves.
(d) all of the above occur.
(c)
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Marginal cost is the change in the:
A) total cost associated with producing one more unit of output. B) average total cost associated with producing one more unit of output C) average variable cost associated with producing one more unit of output. D) opportunity cost associated with producing one more unit of output.
Normative economics seeks to understand behavior, but not make judgments.
Answer the following statement true (T) or false (F)
Specialization and trade exploit differences in productivity across workers and
A. only benefit the exporter. B. make everyone worse off. C. only benefit the importer. D. make everyone better off.
Suppose that a perfectly competitive firm's marginal revenue equals $12 when it sells 10 units of output. If the marginal cost of producing the 10th unit is $14, to maximize its profit the firm should
A) do nothing because it is already maximizing its profit. B) decrease its production. C) increase its production. D) shut down. E) increase the price it charges for its product.