If a Market Is Perfectly Competitive and Is in Long-Run

question 29

Multiple Choice

If a market is perfectly competitive and is in long-run equilibrium,which of the following conditions does not hold?

• A)Price is equal to the minimum long-run average cost of production.
• B)Economic profit equals zero.
• C)The value of the last unit of output produced is equal to the value of the resources used to produce it.
• D)There is an incentive for additional firms to enter the market because existing firms are earning revenues in excess of the explicit costs of production.

Recognize the expected return of a portfolio of risky securities and how it is calculated.

Understand the Capital Allocation Line (CAL) and its significance.

Differentiate among different types of risks (market risk, unique risk, firm-specific risk, diversifiable risk).

Be familiar with Markowitz portfolio theory and the concept of optimal risky portfolio.

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Definitions:

Hampton Institute

Now known as Hampton University, it is a historically Black university located in Hampton, Virginia, established in 1868 to educate freed slaves.

Jack Johnson

The first African-American world heavyweight boxing champion, holding the title from 1908 to 1915, known for breaking color barriers in the sport.

Race Riots

Historical incidents of violent civil unrest and conflict that predominantly stem from racial tension and conflicts between racial or ethnic groups.

Jim Crow Laws

A series of state and local laws in the United States that enforced racial segregation and discrimination against African Americans, especially in the South, from the late 19th century into the 1960s.