A Decrease in the Price of Bubble Gum Below Equilibrium

question 11

Multiple Choice

A decrease in the price of bubble gum below equilibrium will

• A)Shift the bubble gum supply curve to the right.
• B)Shift the bubble gum demand curve to the right.
• C)Cause a surplus of bubble gum.
• D)Cause a shortage of bubble gum.

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Definitions:

Firm-specific Risk

Risk associated with an individual company, as opposed to the market as a whole.

Efficient Frontier

A graphical representation in portfolio management that shows the best possible investment portfolios that offer the highest expected return for a given level of risk.

Risky Assets

Assets that have a higher degree of uncertainty in their returns, often with the potential for higher gains but also higher losses.

Minimum-variance Portfolio

An investment portfolio designed to have the lowest possible risk (variance) for its expected return.