Scenario 17-5 Assume That a Local Bank Sells Two Services, Checking Accounts

question 3

Multiple Choice

Scenario 17-5
Assume that a local bank sells two services, checking accounts and ATM card services. The bank's only two customers are Mr. Donethat and Ms. Beenthere. Mr. Donethat is willing to pay $8 a month for the bank to service his checking account and $2 a month for unlimited use of his ATM card. Ms. Beenthere is willing to pay only $5 for a checking account, but is willing to pay $9 for unlimited use of her ATM card. Assume that the bank can provide each of these services at zero marginal cost.
-Refer to Scenario 17-5.If the bank is able to use tying to price checking account and ATM services,what is the profit-maximizing price to charge for the "tied" good?

• A) $14
• B) $10
• C) $9
• D) $8

Understand the shifts in production possibilities frontier due to changes in labor force size or technology.

Understand the characteristics of different economic systems.

Gain knowledge on the role of government intervention in various economic systems.

Comprehend the concept of a command economic system and its approach to production decisions.

---

Definitions:

Economic Integration

The process by which different countries reduce or eliminate barriers to trade and movement of resources among them to create a more unified and efficient market.

Quota

A restriction placed on the amount of a product allowed to enter or leave a country.

Amount of Product

The quantity of goods or services available for sale or consumption, often measured in physical units or financial terms.

Leave a Country

Refers to the act of exiting a nation's borders, often in the context of individuals or businesses relocating for social, economic, or political reasons.