Free entry is said to exist in an industry when:
A) all firms entering an industry enjoy economies of scale.
B) entry is unfettered by any special legal or technical barriers.
C) equal amounts of inputs are available to all firms entering an industry.
D) the government subsidizes costs for all new firms entering an industry.
B
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The above figure shows the market for bicycles. When there is a physical fitness craze so that everyone wants to exercise the
A) demand curve for bicycles shifts from D1 to D2. B) demand curve for bicycles shifts from D2 to D1. C) demand curve and the supply curve of bicycles do not shift. D) supply curve of bicycles shifts from S1 to S2.
The above table gives the initial balance sheet for Mini Bank. If the bank's desired reserve ratio is 10 percent, how much does this bank have in excess reserves?
A) $60 B) $90 C) $40 D) $10