How is the optimal degree of diversification of a portfolio determined?
The diversification of an investment portfolio in most of the situation reduces the investor's risk. The optimal degree of diversification will differ depending on the relative values the investor places on risk and return.
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If market price is greater than the minimum of AVC but below the minimum of AC, then
A) the firm will shut down. B) revenue covers variable costs and some of the fixed costs and profit is positive. C) revenue covers variable costs and some of the fixed costs, although profit is negative. D) economic profit is zero.
According to the theory of the backward-bending labor supply curve, as the hourly wage keeps rising we
A. eventually reach a maximum number of hours worked. B. eventually reach a minimum number of hours worked. C. keep increasing indefinitely the number of hours worked. D. will work a set number of hours whether or not the wage rate is increased.