Diversification
a. increases the likely fluctuation in a portfolio's return, but reduces market risk.
b. increases the likely fluctuation in a portfolio's return, but reduces firm-specific risk..
c. reduces the likely fluctuation in a portfolio's return and reduces market risk.
d. reduces the likely fluctuation in a portfolio's return and reduces firm-specific risk.
d
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In the decade leading up to the financial crisis of 2008, U.S. housing prices:
A. were falling sharply. B. were rising rapidly. C. increased slowly. D. did not change.
Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly decreases. What might happen to the typical firm in the long run?
a. It would experience no change from the original equilibrium b. It would experience a higher equilibrium price c. It would experience a lower equilibrium price d. It would experience the same equilibrium price but would increase output e. It would experience a lower average total cost and would increase output
Sydney sells snow globes from a cart. When the cart is located on the sidewalk near a discount store, Sydney's customers have reservation prices of $5. When Sydney's cart is located on a sidewalk in an upscale mall, wealthier customers with reservation prices of $10 buy snow globes. Assume that Sydney can sell the same volume at either location and that marginal and average costs are $3 per globe at both locations. Total economic surplus will be maximized if Sydney:
A. sells only near the discount store and charges $5. B. alternates between the two locations and price discriminates. C. sells only in the upscale mall and charges $10. D. alternates between the two locations and charges $5 at both locations.
Consider the accompanying payoff matrix.
The dominant strategy for Row Resorts is to ________ , and the dominant strategy for Column Cruises is to ________ .
A. offer reduced rates; keep rates high B. keep rates high; offer reduced rates C. keep rates high; keep rates high D. offer reduced rates; offer reduced rates