If the rate of return on the stock market is rm and the rate of return on a risk-free asset is rf, then
A) rm - rf measures the risk, all of it nondiversifiable, one has to accept in the stock market.
B) rm - rf measures the risk, all of it diversifiable, one has to accept in the stock market.
C) rm + rf measures the risk, all of it nondiversifiable, one has to accept in the stock market.
D) rm + rf measures the risk, all of it diversifiable, one has to accept in the stock market.
E) rm rf measures the stock market's total risk.
A
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Some people view cosmetic surgery (c) and facials (f) as perfect substitutes as measured by the utility function U(c,f) = 5c + 10f. What is the marginal utility of cosmetic surgery?
A) MU = 5. B) MU = 10. C) MU = 15. D) None of the above.
The aggregate supply curve is
a. the sum of all individual firms' supply curves. b. vertical in the short run. c. downward sloping in the short run. d. upward sloping in the short run. e. upward sloping both in the short run and the long run.
Voluntary programs, direct controls, and emissions taxes are all equally effective ways of controlling pollution.
Answer the following statement true (T) or false (F)
In the circular flow model, the business sector ____ goods and services in ____ markets.
a. demands; product c. supplies; product b. demands; resource d. supplies; resource