Susan Is Investing in the Stock Market

question 11

Multiple Choice

Susan is investing in the stock market.She is choosing among a variety of stocks; each stock has an expected return and a level of risk attached.Susan likes higher returns,but she dislikes risk.If we were to draw indifference curves for Susan over risk and expected return,they would be:

• A) L-shaped.
• B) linear.
• C) upward-sloping.
• D) downward-sloping.
• E) vertical lines.

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Definitions:

Producer Surpluses

The difference between the amount that producers are willing and able to sell a good for and the actual amount received by them after selling it.

Purely Competitive Market

An idealized market structure featuring a large number of small firms, a homogeneous product, and no barriers to entry or exit, ensuring competitive price levels.

Firms

Firms refer to business entities or organizations that produce goods or provide services with the aim of making a profit.

Industry

A sector of the economy that is made up of manufacturing, production, or provision of services within a specific domain of activity or expertise.