Table 3-4 Assume That the Farmer and the Rancher Can Switch Between

question 210

Multiple Choice

Table 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.

-Refer to Table 3-4.The opportunity cost of 1 pound of potatoes for the farmer is

• A) 1/5 pound of meat.
• B) 2 hours of labor.
• C) 5 pounds of meat.
• D) 5 hours of labor.

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Definitions:

Long-Short Hedge Fund

An investment fund strategy that aims to generate returns by taking long positions in undervalued securities and short positions in overvalued securities.

Short Selling

The practice of selling securities or other financial instruments that are not currently owned, and subsequently repurchasing them at a lower price.

Market Neutral

An investment strategy that seeks to avoid some forms of market risk by taking offsetting positions in different securities, aiming for a net market exposure of zero.

Government Regulation

The act of controlling business behavior through a set of rules or laws set forth by the government to achieve outcomes that might not be achieved through free markets.