Risk-averse people will choose different asset portfolios than people who are not risk averse. Over a long period of time, we would expect that
a. every risk-averse person will earn a higher rate of return than every non-risk-averse person.
b. every risk-averse person will earn a lower rate of return than every non-risk-averse person.
c. the average risk-averse person will earn a higher rate of return than the average non-risk-averse person.
d. the average risk-averse person will earn a lower rate of return than the average non-risk-averse person.
d
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The key issue with competition is the role competition plays in eliminating ________ and making the ________ as large as possible
A) cooperative surplus; profits B) producer surplus; consumer surplus C) deadweight losses; cooperative surplus D) shortages; total revenue
A Big Mac costs $4.79 in the United States and 9.6 zlotys in Poland. If the exchange rate is 3 zlotys per dollar, purchasing power parity predicts that
A) the dollar will appreciate as the demand for dollars rises in the long run. B) the dollar will depreciate as the demand for dollars falls in the long run. C) the dollar will appreciate as the supply of dollars falls in the long run. D) the dollar will depreciate as the supply of dollars rises in the long run.
A firm maximizes profits when the ________ equals the ________
A) actual marginal product of capital; actual marginal product of labor B) actual marginal product of capital; expected marginal product of capital C) expected marginal product of capital; the opportunity cost of capital D) expected marginal product of capital; user cost of capital
To compute the present value of a future value, you must know the _________ and the _________.
A. interest rate; compounding interest B. interest rate; time period C. compounding interest; time period D. None of these statements is true.