Inspired by the beautiful private tennis courts of some of its residents, the town of Lakeland built a pristine tennis park with five courts. Within three years the nets had been torn down, trash was piled everywhere, and graffiti was written on the courts. This story demonstrates the concept of the ______.

If a competitive firm maximizes short-run profits by producing some quantity of output, which of the following must be TRUE at that level of output?

A) p > MC B) MR > MC C) p ? AVC D) All of the above.

If a bank has $500 in excess reserves and the reserve requirement is 20 percent, then the maximum amount by which this individual bank can increase the money supply is _____

a. $100 b. $400 c. $500 d. $1,000 e. $2,500