Differential Calculus and Optimization Quiz

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What is the process of finding the maximum and minimum point of a function called?

Optimization (correct)

Multi variable unconstrained optimization

Normative economic decision analysis

Differential Calculus

In a price-output decision-making problem, the objective may be to determine the output level that maximizes:

Cost of production

Normative economic decision analysis

Profits (correct)

Net present value of investments

What is the goal in a production problem according to the given text?

Maximize profits

Maximize net present value of investments

Select projects for capital budgeting

Minimize cost of producing a desired level of output (correct)

What is involved in normative economic decision analysis according to the text?

Determining the action that best achieves a desired goal or objective Signup and view all the answers

What does the Second-Derivative Test for Optimum determine?

Maximum and minimum points of a function Signup and view all the answers

What is the first order condition for optimization?

Finding the critical points by setting the first order derivative to zero Signup and view all the answers

What is the process of finding the combination of inputs (resources) that minimizes the cost of producing a desired level of output called?

Constrained Optimization Signup and view all the answers

What is the first order derivative used for in optimization?

Finding the rate of change of a function Signup and view all the answers

What makes the first order condition for optimization sufficient to indicate an optimal point?

First Derivative Test Signup and view all the answers

When is a point considered to be a maximum according to the First Derivative Test?

If the first derivative changes from positive to negative Signup and view all the answers

According to the Second-Derivative Test, when is a point considered to be a maximum?

If the second derivative is less than 0 Signup and view all the answers

What can be done if the sign of the second order derivative is not known?

Resort to the first order derivative test Signup and view all the answers

What does the first order condition for optimization help find?

Critical points / stationary points Signup and view all the answers

"If f’(x) has the same sign on both the immediate left and immediate right of point x*, it is neither maximum nor a minimum." What does this statement imply?

"V" shaped curves have no maximum or minimum points Signup and view all the answers

What is the condition used to find the critical points or stationary points in optimization?

First order condition Signup and view all the answers

Which test is used to determine if a point is a maximum or minimum according to the first order derivative test?

First Derivative Test Signup and view all the answers

What does the second order derivative test determine about a point?

Both of the above Signup and view all the answers

When is a point considered to be neither a maximum nor a minimum according to the First Derivative Test?

When the first derivative has the same sign on both sides of the point Signup and view all the answers

What should be done if the sign of the second order derivative is not known when testing for optimality?

Resort to the First Derivative Test Signup and view all the answers

What does normative economic decision analysis involve?

Determining the action that best achieves a desired goal or objective Signup and view all the answers

What is the main goal in a capital budgeting problem?

Selecting projects that maximize the net present value of the investments chosen Signup and view all the answers

What is the process of finding the maximum and minimum point of a function called?

Optimization Signup and view all the answers

In a production problem, what is the goal related to the combination of inputs?

Finding the combination of inputs that minimizes the cost of producing a desired level of output Signup and view all the answers

What is involved in solving normative economic decision analysis problems?

Determining the action that best achieves a desired goal or objective Signup and view all the answers

Differential Calculus and Optimization Quiz

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Questions and Answers

What is the process of finding the maximum and minimum point of a function called?

In a price-output decision-making problem, the objective may be to determine the output level that maximizes:

What is the goal in a production problem according to the given text?

What is involved in normative economic decision analysis according to the text?

What does the Second-Derivative Test for Optimum determine?

What is the first order condition for optimization?

What is the process of finding the combination of inputs (resources) that minimizes the cost of producing a desired level of output called?

What is the first order derivative used for in optimization?

What makes the first order condition for optimization sufficient to indicate an optimal point?

When is a point considered to be a maximum according to the First Derivative Test?

According to the Second-Derivative Test, when is a point considered to be a maximum?

What can be done if the sign of the second order derivative is not known?

What does the first order condition for optimization help find?

"If f’(x) has the same sign on both the immediate left and immediate right of point x*, it is neither maximum nor a minimum." What does this statement imply?

What is the condition used to find the critical points or stationary points in optimization?

Which test is used to determine if a point is a maximum or minimum according to the first order derivative test?

What does the second order derivative test determine about a point?

When is a point considered to be neither a maximum nor a minimum according to the First Derivative Test?

What should be done if the sign of the second order derivative is not known when testing for optimality?

What does normative economic decision analysis involve?

What is the main goal in a capital budgeting problem?

What is the process of finding the maximum and minimum point of a function called?

In a production problem, what is the goal related to the combination of inputs?

What is involved in solving normative economic decision analysis problems?

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