A firm's markup is the amount by which ________ exceeds ________. ...

[MGLQZ]

A firm's markup is the amount by which ________ exceeds ________.
 
  A) price; average total cost
  B) price; marginal cost
  C) average total cost; marginal cost
  D) price; average variable cost

Question 2

A bank reports reserves of 100,000, government securities of 50,000, loans of 750,000, and checkable deposits of 900,000. The desired reserve ratio is 10 percent. What is the amount of excess reserves for this bank? Show your work.
 
  What will be an ideal response?

[katkat_flores]

Answer to Question 1

B

Answer to Question 2

Excess reserves equal the actual reserves minus the desired reserves. The actual reserves are 100,000. The bank wants to keep 10 percent of its checkable deposits as reserves, so the desired reserves are (900,000 )  0.10 = 90,000. So excess reserves equal 100,000 - 90,000 = 10,000.

[MGLQZ]

Gracias!

[connor417]

Thanks for the timely response, appreciate it