Maggie is trying to convince her friend Hannah to spend the morning at the beach instead of studying economics. Maggie’s argument is that the beach is free so will not cost Hannah anything to go. Maggie even volunteers to drive. Maggie’s argument
a. is correct; it is free to go to the beach.
b. is forgetting Hannah’s opportunity cost of not being able to study.
c. assumes Hannah has to eat at home or the beach so it will not cost Hannah additional money.
d. is forgetting sunk costs.
b. is forgetting Hannah’s opportunity cost of not being able to study.
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Assume that the reserve requirement is 10 percent. A $1,000 cash deposit into a savings account will immediately increase the bank's required reserves by _____
a. $10,000. b. $500. c. $100. d. $1,500. e. $10.
Economies of scale occur when there are
A) decreases in long-run average costs resulting from increases in output. B) no changes in long-run average costs when output increases. C) increases in long-run average costs when output increases. D) decreases in output resulting from decreases in input.