If interest rates rise by 5 percentage points, say from 10 to 15%, bank profits (measured using gap analysis) will
A) decline by $0.5 million.
B) decline by $1.5 million.
C) decline by $2.5 million.
D) increase by $2.0 million.
A
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A tax on a polluting industry
A) is not desirable because it reduces efficiency. B) leads to less output in this industry. C) causes more resources to be used in the polluting industry. D) shifts the marginal social benefit curve leftward. E) shifts the marginal social benefit curve rightward.
Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is ________
A) 1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible B) 2 rides per day C) 4 rides per day D) 6 rides per day because that is the maximum number of rides
Goods and services produced by the government are sold at prices that are set to recover production costs
a. True b. False
Other things being equal, as diminishing marginal returns begin to occur, the marginal revenue product of labor:
A. decreases as more workers are used. B. increases as more workers are used. C. remains unchanged as more workers are used. D. None of these