At a given price, a surplus occurs when
a. the quantity demanded is more than the quantity supplied.
b. the quantity demanded is the same as the quantity supplied.
c. the quantity supplied is less than the quantity demanded.
d. the quantity supplied is greater than the quantity demanded.
Ans: d. the quantity supplied is greater than the quantity demanded.
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A commercial bank's ability to lend is determined by its
A) required reserves. B) excess reserves. C) total reserves. D) capital.
Firms in long-run equilibrium in a perfectly competitive industry will produce at the low points of their average total cost curves because:
a. free entry implies that long-run profits will be zero no matter how much each firm produces. b. firms seek maximum profits and to do so they must choose to produce where average costs are minimized. c. firms maximize profits and free entry implies that maximum profits will be zero. d. firms in the industry desire to operate efficiently.