Assume there is a decrease in the market demand for a good sold by price-taking firms that are initially producing the profit-maximizing level of output. For the individual firm, this would result in:
A) a decrease in both price and the profit-maximizing quantity of output.
B) a decrease in price and increase in the profit-maximizing quantity of output.
C) an increase in both price and the profit-maximizing quantity of output.
D) an increase in price and decrease in the profit-maximizing quantity of output.
A
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Banks earn profits from off-balance sheet loan sales
A) by foreclosing on delinquent accounts. B) by selling the loans at discounted prices. C) by selling existing loans for more than the original loan amount. D) by calling-in loans before the maturity date.
If the consumer's income increases while the prices of both goods remain unchanged, what will happen to the budget line?
A) The budget line rotates inward from the intercept on the horizontal axis. B) The budget line rotates outward from the intercept on the vertical axis. C) The budget line shifts inward without a change in slope. D) The budget line shifts outward without a change in slope.
If a price ceiling of $8 were placed in the market in the graph shown:
A. a shortage of 7 would occur.
B. a shortage of 15 would occur.
C. a shortage of 23 would occur.
D. a shortage of 8 would occur.
By serving as the lender of last resort,
A. the Fed supervises depository institutions. B. the Fed provides check clearing services. C. the Fed can prevent bank failures. D. the Fed aids in the sale of government securities.