Marginal Cost

question 128

Multiple Choice

Marginal cost

• A) increases as more is produced.
• B) remains constant as more is produced.
• C) decreases as more is produced.
• D) decreases as marginal benefits decrease.

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Definitions:

Risk-Free Asset

An investment that is expected to return its full face value with zero risk of financial loss.

Required Rate of Return

The minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular security or project.

Total Risk

Represents the full spectrum of all types of risk associated with an investment, including both systematic and unsystematic risks.

Market Risk

The risk of losses in investments caused by factors that affect the entire market or economy, such as geopolitical events or changes in interest rates.