Fill in this table. Assume that fixed cost is $100.

Suppose a competitive firm is paying a wage of $12 an hour. Assume that labor is the only input. If hiring another worker would increase output by four units per hour, then to maximize profits the firm should

A) layoff some workers. B) not change the number of workers it currently hires. C) hire the extra worker. D) There is not enough information to answer the question.

Big Bucks Bank currently holds $20 million in excess reserves. If the Fed increases the rate of interest it pays on reserves held at the Fed, we would expect Big Bucks Bank to:

A. use those excess reserves to increase its lending. B. not change its lending activity, as excess reserves are not eligible to receive interest paid on reserve accounts. C. move a portion of those excess reserves into its required reserve account. D. hold more of those excess reserves in its reserve account at the Fed, reducing the amount it is willing to lend.