All firms maximize profits by producing an output level where marginal revenue equals marginal cost; for firms operating in perfectly competitive industries, maximizing profits also means producing an output level where price equals marginal cost
a. True
b. False
Indicate whether the statement is true or false
True
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The statement that "water is a necessity" is misleading because
A) it does not distinguish fresh water from salt water. B) it fails to specify for whom water is a necessity. C) it incorrectly assumes people use water only or primarily for drinking. D) water is a necessity only in desert environments. E) water is extremely abundant.
Which of the following is NOT a reason that firms in the shadow banking system were more vulnerable than commercial banks during the financial crisis of 2007-2009?
A) They could invest in riskier assets. B) Investors had no insurance against loss of principal. C) They made investments that would lose value if housing prices decline. D) They were more heavily regulated than commercial banks, making them less able to adjust to changing market conditions.