Which of the following is an example of a bank realizing economies of scope?
A) The bank develops a standard mortgage loan application to make the process of loaning out mortgages easier.
B) The bank reduces costs of credit checking for the loan process by outsourcing the process to a specialist.
C) By using the information collected from a corporation, the bank can decide how easy it would be to sell bonds issued by the corporation to the public.
D) A bank in a rural area specializes in providing agricultural loans.
C
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The theory of consumer choice is based on the hypothesis that each consumer wants to
a. maximize her total utility. b. maximize her marginal utility. c. minimize the rate at which her marginal utility diminishes. d. minimize the percentage of her consumption diverted to inferior goods.
Defenders of advertising argue that it is not rational for profit-maximizing firms to spend money on advertising for products that have
a. superior quality. b. inferior or mediocre quality. c. low prices. d. limited availability.
A bank's reserve ratio is 5 percent and the bank has $2,280 in reserve. Its deposits amount to
a. $114. b. $2,166. c. $2,400. d. $45,600.
Every society faces economic trade-offs. This means
A) not everyone can have enough goods to survive. B) some people live better than others do. C) society's output cannot be made available to all. D) producing more of one good means less of another good can be produced.