Chapter 2: Practice Quiz



Chapter 2: Quiz

1. The equation [pic] means

a. profit is equal to the product of q and p.

b. profit is a function of q.

c. profit is a function of q and p.

d. profit is a function of the product of q and p.

e. none of the above.

2. Looking at the function y=f(x), if the derivative of the function is equal to zero for a particular value of x, this means that

a. the function is maximized at that value of x if the second derivative is zero.

b. the function is minimized at that value of x if the second derivative is positive.

c. the function is neither maximized nor minimized at that value of x.

d. either a or b, but not c.

e. either a or b or c.

3. The profit function π(q) = 24q - q2

a. is maximized at q=12.

b. is minimized at q=6.

c. is maximized at q=4.

d. is maximized at q=3.

e. none of the above.

4. At a point where f’(x)=0, if the second derivative is

a. positive, the function is maximized.

b. positive, the function is minimized.

c. negative, the function is minimized.

d. both a and c.

5. For the function y = 5x2 + 3z3 – 2xz, the partial derivative with respect to x is

a. 10.

b. 10x2.

c. 10z2 – 2z.

d. 10x – 2x.

e. none of the above.

6. In the Lagrangian [pic],

a. f(x1,x2,….,xn) is the objective function.

b. g(x1,x2,….,xn) = 0 is the constraint.

c. both a and b.

d. both f(x1,x2,….,xn) and g(x1,x2,….,xn) are the objective functions.

7. In a utility maximization problem, the interpretation of the Lagrange multiplier, λ, is

a. the marginal value of good x.

b. the marginal utility of another unit of good x.

c. the marginal utility of income.

d. willingness to pay for a reduction in the price of x.

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