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Questions and Answers
What is the process of finding the maximum and minimum point of a function called?
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:
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?
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?
What is involved in normative economic decision analysis according to the text?
What does the Second-Derivative Test for Optimum determine?
What does the Second-Derivative Test for Optimum determine?
What is the first order condition for optimization?
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 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 is the first order derivative used for in optimization?
What makes the first order condition for optimization sufficient to indicate an optimal point?
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?
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?
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 can be done if the sign of the second order derivative is not known?
What does the first order condition for optimization help find?
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?
"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?
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?
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?
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?
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 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 does normative economic decision analysis involve?
What is the main goal in a capital budgeting problem?
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?
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?
In a production problem, what is the goal related to the combination of inputs?
What is involved in solving normative economic decision analysis problems?
What is involved in solving normative economic decision analysis problems?
