Assume that a bank initially has no excess reserves. If it receives $5,000 in cash from a depositor and the bank finds that it can safely lend out $4,500, the reserve requirement must be:
A. zero.
B. 10 percent.
C. 20 percent.
D. 25 percent.
B. 10 percent.
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What will be an ideal response?
If an environmental group wanted to prevent the habitat destruction of the Wyoming pocket gopher, the Coase theorem would direct the group to
A) try to get laws enacted to protect the species. B) bargain in order to obtain the property rights of the gopher habitat. C) physically block any efforts to destroy the habitat. D) protest the destruction while gaining media attention for their cause.
When the marginal product equals the average product, the
A) average product curve is downward sloping. B) average product curve is upward sloping. C) marginal product is at its maximum. D) average product is at its maximum.
A firm's marginal cost has a minimum value of $80, its average variable cost has a minimum value of $90, and its average total cost has a minimum value of $100 . Then the firm will shut down in the short run once the price of its product falls below
a. $100. b. $90. c. $80. d. $40.