From the banker's perspective, dollars held as required reserves in bank vaults
A) earn a low rate of interest.
B) earn no rate of interest.
C) earn a market rate of interest.
D) earn profits.
B
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The fact that Alice spends no money on travel:
A) implies that she does not derive any satisfaction from travel. B) implies that she is at a corner solution. C) implies that her MRS does not equal the price ratio. D) any of the above are possible.
In closing down a military base, environmental inspectors found 100 tons of toxic waste. Which of the following is NOT a determinant of the consumer surplus generated by cleaning up 40 tons of waste?
A) The price of removing a ton of toxic waste B) The original quantity of toxic waste found by the inspectors C) The quantity of toxic waste removed by cleanup D) The effect of each ton reduction of toxic waste on the profitability of the alternative uses for this land E) The effect of each ton reduction of toxic waste on the health of citizens living near the base