If a bank has $1 million in demand deposits, $400,000 in reserves, and faces a 30 percent reserve requirement, the amount of money that a bank could initially create by loaning out their excess reserves is:

In the health insurance market, adverse selection occurs when

A) chronically ill people buy health insurance. B) insured people go to the doctor unnecessarily. C) patients sue their doctor. D) people with health insurance tend to behave more recklessly.

If a regulatory commission imposes upon a nondiscriminating natural monopoly a price that is equal to marginal cost and below average total cost at the resulting output, then:

A. the firm will realize an economic profit. B. the firm will earn only a normal profit. C. allocative efficiency will be worsened. D. the firm must be subsidized or it will go bankrupt.