Wayne and Sarah Are Trying to Manage the Risk They

question 168

Multiple Choice

Wayne and Sarah are trying to manage the risk they face in life a best as they can. They are following Principle 7 which states:

• A) The best protection is knowledge.
• B) Protect yourself against major catastrophes.
• C) Nothing happens without a plan.
• D) Diversification reduces risk.
• E) The best insurance is prevention.

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Definitions:

Profit-Maximizing

This refers to the process businesses use to determine the output level at which profits are at their highest.

Marginal Revenue Curve

A graph that displays how additional revenue is affected by the sale of one more unit of a product or service.

Downsloping

describes a trend or curve that goes downward, often used in economics to describe demand curves where price decreases lead to an increase in quantity demanded.

Economic Profits

Profits exceeding the opportunity costs of a venture or investment, accounting for both explicit and implicit costs.