A portfolio of assets has lower risk than holding one asset, but the same expected return and higher transaction costs. Which of the following statements is most correct?
A. The portfolio is attractive to investors who are risk seekers.
B. The portfolio is not attractive to investors who are risk-neutral.
C. The portfolio is attractive to people who are risk-averse and risk-neutral, but not to risk seekers.
D. The portfolio is attractive to investors who are risk-neutral.
Answer: B
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When the government uses a cap-and-trade approach in dealing with pollution, it
A) uses taxes in order to internalize the externalities caused by the pollution. B) imposes quantitative limits on the amount of pollution firms are allowed to generate. C) uses subsidies to encourage firms to use new technology that reduces pollution. D) distributes information to consumers and producers on how to reduce pollution.
In reaction to the passage of the Smoot-Hawley Tariff, Canada as well as many other U.S. trading partners
A) refused to export any products to the United States. B) eliminated tariffs on U.S. imports. C) refused to import any products from the United States. D) enacted large increases in tariffs on U.S. imports.
Which of the following is NOT a characteristic of perfectly competitive markets?
A) The government restricts the number of producers through licensing requirements. B) All market participants are price-takers. C) It is easy to find a trading partner. D) All products are identical.
Which of the following is an example of human capital?
a. the comfortable chair in your dorm room where you read economics texts b. the amount you get paid each week to work at the library c. the things you have learned this semester d. any capital goods that require a human to be present to operate