Suppose We Observe That Movie Theatre Prices Are Less During

question 96

Multiple Choice

Suppose we observe that movie theatre prices are less during the daytime than in the evening. If the supply of movies does not change between daytime and evening, then the most likely explanation for this difference in price is

• A)the evening demand curve is to the left of the daytime demand curve.
• B)the evening supply curve is to the right of the daytime supply curve.
• C)the evening demand curve is to the right of the daytime demand curve.
• D)the evening supply curve is to the left of the daytime supply curve.

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Definitions:

Risky Asset

An asset that has a significant degree of risk associated with it, offering the potential for higher returns in exchange for the increased risk.

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean and is used in finance to gauge the amount of historical volatility of an investment.

Risk-Free Asset

An investment that is expected to return its principal and interest with near certainty, such as government bonds from stable countries.

Risky Asset

An investment that has a significant degree of uncertainty in its returns.