-The Graph Above Illustrates the Market for Bottled Water

question 25

Multiple Choice

-The graph above illustrates the market for bottled water.When the price exceeds the equilibrium price,the quantity demanded is ________ the quantity supplied and the price of the good will ________.

• A)greater than;fall
• B)less than;fall
• C)greater than;rise
• D)less than;rise
• E)equal to;fall

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Definitions:

William Sharpe

An economist who created the Sharpe Ratio, a measure to calculate risk-adjusted return.

SML (Security Market Line)

A line in the Capital Asset Pricing Model that shows the relationship between the expected return of a security and its risk.

Risk Averse

A tendency to prefer certainty over uncertain outcomes to minimize exposure to financial loss.

Market Equilibrium

A situation in a market where the quantity supplied equals the quantity demanded at a certain price level, resulting in no net shortage or surplus.