Hedging Strategies as a Means of Managing Price Volatility Are

question 34

Multiple Choice

Hedging strategies as a means of managing price volatility are appropriate for inputs

• A) where a large shift in supply or in demand results in a small price change
• B) where a small shift in supply or in demand results in a large price change
• C) where supply and demand are independent of price changes
• D) where substitute products exists

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Definitions:

Consume

The action of using up goods and services to satisfy personal or collective wants or needs.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choosing to do one thing over another.

Production Possibilities Schedule

A table or graph that shows the various combinations of two goods or services that an economy can produce using all its resources efficiently.