To maximize profits, a perfectly competitive firm should do all the following except:
A. produce until marginal cost equals price.
B. produce until per-unit profits are maximized.
C. produce until marginal revenue equals marginal cost.
D. produce until economic profits are maximized.
Answer: B
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A monopoly will be maximizing profits if it is operating at the point where:
a. price is at a maximum. b. average cost is at a minimum. c. average cost is at a maximum. d. marginal cost is at a minimum. e. marginal revenue = marginal cost.
The major protection against sudden mass attempt to withdraw cash from banks is the:
a. Federal Reserve. b. Consumer Protection Act. c. deposit insurance provided by the FDIC. d. gold and silver backing the dollar.
What are the economic effects of a currency appreciation?
a. It will decrease aggregate demand and aggregate supply, so that output will certainly fall, and prices may fall as well. b. It will increase aggregate demand and aggregate supply, so that output will certainly rise, and prices may rise as well. c. It will increase aggregate demand and decrease aggregate supply, so that prices will certainly rise and output may rise as well. d. It will decrease aggregate demand and increase aggregate supply, so that prices will certainly fall and output may fall as well.
Identify the four broad categories that make up the asset side of the balance sheet for banks and which category is usually the largest.
What will be an ideal response?