Diversification Reduces

question 4

Multiple Choice

Diversification reduces

• A)systematic risk
• B)unsystematic risk
• C)market risk
• D)purchasing power risk

---

Definitions:

Wage Increase

An upward adjustment in the amount of earnings a worker receives for their labor.

Elasticity of Resource Demand

A measure of how the quantity demanded of a resource changes in response to a change in price.

Resource Prices

The cost of inputs used in the production of goods and services, such as labor, capital, land, and raw materials.

Marginal Revenue Product

The extra income obtained through the use of an additional unit of a resource, for example, capital or labor.