Concentration ratios may be inaccurate indicators of the degree of monopoly power in an industry because:
A. they include interindustry competition.
B. foreign competition is not considered.
C. they are only calculated for local and regional markets.
D. they do not distinguish between normal and economic profit.
Answer: B
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The above figure shows the market for winter jackets. In an effort to keep the nation warm, the president places a price ceiling of $100 in the market for winter jackets. Which of the following statements is true?
A) After taking account of the resources lost in search, consumer surplus increases when the price ceiling is in place. B) There will be a surplus of jackets. C) Because the price of a jacket is lowered, consumers end up buying more jackets with the price ceiling than without it. D) Producer surplus decreases if there is a price ceiling. E) The quantity supplied of jackets is greater that quantity demanded when there is a price ceiling.
Off-balance-sheet activities
A) generate fee income with no increase in risk. B) increase bank risk but do not increase income. C) generate fee income but increase a bank's risk. D) generate fee income and reduce risk.