A highly leveraged bank risks ______.
a. missing out on massive profits
b. being unable to borrow from the Fed
c. going bankrupt if the value of its assets falls
d. losing up to the total amount of its initial investment
c. going bankrupt if the value of its assets falls
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Refer to Scenario 10.2. Suppose that in addition to the tax, a business license is required to stay in business. The license costs $1000. What happens to profit?
A) It increases by $1000. B) It decreases by $1000. C) It decreases by less than $1000. D) It stays the same.
As firms exit a competitive price-searcher market, profits of remaining firms
a. decline and product diversity in the market decreases. b. decline and product diversity in the market increases. c. rise and product diversity in the market decreases. d. rise and product diversity in the market increases.
Trade among nations is ultimately based on
a. absolute advantage. b. strategic advantage. c. comparative advantage. d. technical advantage.
Drinking a can of cola gives Richard 20 utils of satisfaction. How many additional utils would you expect Richard would get from drinking a second can of cola?
(a) 20 utils. (b) Less than 20 utils. (c) More than 20 utils. (d) 40 utils.