According to the Von Thünen Model, What Factor Determines the Distribution

question 229

Multiple Choice

According to the von Thünen model, what factor determines the distribution and intensity of agriculture in relation to markets?

• A) quality of the crops or livestock
• B) agricultural policy
• C) transportation costs
• D) climate

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Definitions:

Risk Level

The degree of uncertainty associated with an investment's returns, reflecting the potential for loss or lower than expected performance.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements, often used in capital budgeting.

Risk-Free Rate

A benchmark interest rate at which an investment is expected to yield a return without any risk of financial loss, usually associated with government securities.

Market Risk Premium

The extra return that investors require for choosing to invest in the general market rather than risk-free investments.