If the price of labor is constant and a firm experiences diminishing marginal product, then its
A) marginal costs decrease.
B) fixed costs increase.
C) average variable cost increases.
D) total costs decrease.
Answer: C
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Based on the table above, equilibrium real GDP is
A) $6 trillion. B) $7 trillion. C) $9 trillion. D) $8 trillion. E) $10 trillion.
The Intracoastal Bank has $5 million in deposits and $500,000 in reserves. If the required reserve ratio is 5%, excess reserves are equal to
A. zero. B. $125,000. C. $250,000. D. $500,000.
One reason individuals are willing to pay for information in uncertain situations is that information
A) can reduce uncertainty. B) is a way to diversify. C) is a method of insurance. D) is a method of self-insurance. E) always reduces the difference between the probabilities of possible outcomes.
For an individual's supply curve of labor to be backward bending:
a. the substitution effect must be greater than the income effect. b. the substitution effect must be equal to the income effect. c. the substitution effect must be less than the income effect. d. is an impossibility.