Which of the Following Statements Is True About the Demand

question 116

Multiple Choice

Which of the following statements is true about the demand for and/or the supply of natural resources?

• A) The supply curve for natural resources is more elastic in the long run than in the short run.
• B) The elasticity of demand for electricity, natural gas, and gasoline equals approximately 0.1 in both the short run and the long run.
• C) Natural resources are demanded by consumers and producers in steadily growing amounts, so future shortages are inevitable.
• D) The supply of many natural resources is finite; thus the long-run elasticity of supply must be zero.

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Definitions:

Firm's Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 means the stock is more volatile than the market, while a beta less than 1 means it is less volatile.

Single-Factor Market Model

A financial model that explains a security's returns as the outcome of a single market-wide factor and the security's sensitivity to that factor.

Unsystematic Risk

The risk associated with a specific company or industry that can be mitigated through diversification.

Residuals

Residuals are differences between observed and predicted values in statistical models, used to assess the fit of models to data.