With the Introduction of Risk Free Lending and Borrowing, the Markowitz

question 17

Multiple Choice

With the introduction of risk free lending and borrowing, the Markowitz efficient set

• A) is even more efficient at various risk and return tradeoffs
• B) becomes inefficient altogether
• C) lies more to the northwest
• D) becomes inefficient except at one point

Understand how the theory of comparative advantage underpins productivity and economic relationships.

Recognize the constraints posed by scarcity on production and consumption.

Understand the relationship between employment levels and the production possibilities frontier (PPF).

Understand the concept of production possibility frontiers (PPF) and how they illustrate opportunity costs and efficient resource allocation.

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