Thomas Edison once complained that he was not making a profit selling light bulbs because his plants were operating 25 percent below capacity. He estimated that he could increase output 25 percent with a 2 percent increase in the cost of production. He sold the 25 percent on the foreign market at a price below what he called the "cost of production." We can deduce that Edison really meant
a. Marginal cost was below average cost but less than marginal revenue.
b. Average cost exceeded variable cost, which exceeded marginal revenue.
c. Variable cost exceeded fixed cost but was less than marginal revenue.
d. Marginal cost was above average cost but greater than marginal revenue.
a
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Suppose that a bank has $30 million in asset X, $10 million in asset Y, and $20 million in asset Z. Each asset has a different risk weight. The risk weight for asset X is 30%, the risk weight for asset Y is 60%, and the risk weight for asset Z is 10%. The amount of risk-weighted assets for this bank is ____________ million. Assuming that the bank has to hold capital equal to 8% of its
risk-weighted assets, the bank must hold _____________ million in capital. A) $17; $13,6 B) $60; $4.8 C) $17; $1.36 D) $66; $5.28
Which of the following is a benefit of the price system?
A) the existence of positive externalities B) the production of public goods C) Consumers have what they want since politicians and business managers decide what is to be produced. D) the freedom of consumers to decide what they want to purchase