If two events are perfectly negatively correlated, then
A) diversification can reduce but not eliminate risk.
B) diversification can eliminate risk.
C) diversification has no impact on risk.
D) diversification cuts risk in half.
B
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Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
Sd + Q is the product supply curve after an import quota is imposed. A quota of y?w will
A. increase the revenues of domestic producers by areas E + F + G + H + J. B. increase the revenues of domestic producers by areas E + F + K. C. lower domestic price and increase domestic consumption. D. increase the revenues of domestic producers by areas G + H.
A person with a diminishing marginal utility of income
A) will be risk averse. B) will be risk neutral. C) will be risk loving. D) cannot decide without more information
Consider a system in which a person earning $10,000 pays $1,000 in taxes, a person earning $25,000 pays $2,000 . and someone earning $60,000 pays $4,000 . What type of tax is this?
a. progressive b. proportional c. regressive d. property tax e. one based on the benefits principle of taxation
The decreasing portion of a firm's long run average cost curve is attributable to:
A. diminishing returns to scale. B. increasing marginal cost. C. economies of scale. D. diseconomies of scale.