Diversifying to reduce volatility is a good idea only if
A. shareholders are willing to pay premium for a company in order to reduce return volatility.
B. firms are willing to invest in capital formation.
C. shareholders can diversify within their own investment portfolios at low cost.
D. firms account for social costs of production.
Answer: A
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Why does the United States regulate automobile manufacturing in so many ways?
(A) To protect the consumer from Japanese and European automobiles. (B) To keep the price of U.S. automobiles competitive with others. (C) To offset the air pollution caused by automobiles. (D) To keep the manufacturers of U.S. automobiles from gaining too much of the market.
What type of economic conditions are summarized by the variable a?
A) conditions other than changes in capital and labor that change productivity B) urbanization C) governmental regulations D) All of the above