What is meant by optimization? How does optimization by levels differ from optimization by differences?
What will be an ideal response?
Optimization is the process that describes almost all of the choices that people, households, businesses, and governments make. Since resources are scarce, people need to make choices. Choices involve tradeoffs. Optimization involves studying these tradeoffs and making the best possible choice. Optimization in levels analyzes the total net benefit of different alternatives while optimization in differences analyzes the change in net benefits when you switch from one alternative to another. Optimization in levels and optimization in differences always yield the same answer.
You might also like to view...
In the classical model, the demand for loanable funds comes from
a. consumption expenditures and the government deficit, if any b. net taxes and government expenditures c. government purchases d. investment spending and the government deficit, if any e. consumption expenditures, investment spending and government purchases
If there is excess demand in a market, then this suggests that:
A. there is no way to help some people without harming others. B. the market is in equilibrium. C. the market price is above the equilibrium price. D. there is an opportunity for mutually beneficial trades.
One of the primary causes of the banking collapse in the 1930s was ______.
a. artificial inflation of the housing market b. depositor fears resulting in bank runs c. the collapse of Lehman Brothers d. very high reserve requirements set by the FOMC
Credit cards are considered to be part of the money supply.
Answer the following statement true (T) or false (F)