Refer to the graph. Suppose a particular financial asset's risk and return profile puts it at point E. The process of arbitrage will:
A. move the financial asset to point G on the Security Market Line.
B. move the financial asset to point D.
C. move the financial asset to point F.
D. not change the financial asset's position on the Security Market Line.
D. not change the financial asset's position on the Security Market Line.
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The tax decreases consumption by
A) 1,000 blouses. B) 2,000 blouses. C) 3,000 blouses. D) 4,000 blouses.
If marginal benefit is greater than marginal cost, output is inefficiently high
Indicate whether the statement is true or false
There are 10,000 families in a neighborhood that are affected by noise pollution from a local factory. The noise could be reduced if the company spent $5,000 on technological improvements. The company agrees to make these improvements if the affected families contribute the $5,000. Since there are so many families, they fail to come to a resolution to which they will all agree. This outcome is an example of the
A. drop-in-the-bucket problem. B. collective action problem (that arises when there are too many parties involved). C. Coase theorem. D. free-rider problem.