One Way to Promote a New Business Is to Offer

question 82

Multiple Choice

One way to promote a new business is to offer free items.If you were to open a new restaurant and offer free food,you likely would have a line out the door.How would an economist understand the behavior of those standing in line?

• A) Those waiting in line place a high value on the use of their time.
• B) Those waiting in line believe that the marginal cost of waiting in line exceeds the marginal benefit of waiting in line.
• C) Those waiting in line place a low value on the use of their time.
• D) Those waiting in line believe that the marginal cost of waiting in line is zero.
• E) Those waiting in line believe that the marginal benefit of waiting in line is zero.

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Definitions:

Efficient Frontier

The efficient frontier is a concept in modern portfolio theory representing those portfolios that offer the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.

Minimum Risk Portfolios

Investment strategies that aim to minimize the overall risk of a portfolio through diversification and asset allocation.

Expected Returns

The anticipated profit or loss from an investment over a specific period.

High-Beta Stock

Stocks with a beta value higher than 1, indicating they are more volatile than the market as a whole.