Exhibit 7-18 -Consider Exhibit 7-18. the Rotation from AB to AC Reflects

question 14

Multiple Choice

Exhibit 7-18
-Consider Exhibit 7-18. The rotation from AB to AC reflects a(n)

• A) increase in the price of labor
• B) increase in the price of land
• C) decrease in the price of labor
• D) decrease in the price of land
• E) increase in the amount the producer can spend

---

Definitions:

Black-Scholes

A mathematical model used to calculate the theoretical price of European style options based on risk, time, and other factors.

Variance

A statistical measure of the dispersion or spread between numbers in a data set.

Call Option

A financial contract giving the option buyer the right, but not the obligation, to buy a specified quantity of an asset at a set price within a specified time.

Call Option

A finance-related agreement that allows the buyer the choice, yet not the duty, to purchase an equity, debt instrument, commodity, or another type of asset at an agreed-upon price within a set period.