53. Calculus is used in economics mainly to a. discover total relations between

Question

53.        Calculus is used in economics mainly to

a.   discover total relations between one variable and another.

b.   gauge how one variable changes in relation to another.

c.   refer to an invention by F. Y. Edgeworth.

d.   honor its founder, Isaac Newton.

54. Constrained maximization

a.   is a straightforward application of the differential calculus.

b.   is a mathematical procedure that describes the consumer’s solution to the problem of utility maximization.

c.   produces an optimum result so that consumers (or producers) “get the most for what they’ve got.”

d.   all of the above.

e.   none of the above.

55. Matrix algebra is highly useful in economics because

a.   it facilitates the use of large numbers of equations and variables.

b.   it displaces integral calculus.

c.   it is applicable to game theory.

d.   all of the above.

e.   none of the above.

56. Linear models have had successes and failures in the “real world.” They

a.   were able to successfully predict inputs and outputs in the Soviet economy.

b.   were used to predict the extent of steel shortages during World War II.

c.   have been able to bridge the gap between Keynesian macroeconomic analysis and general equilibrium theory.

d.   a. and c.

e.   b. and c.

Explanation / Answer

53. Answer: b.   gauge how one variable changes in relation to another.

Explanation: Through derivative, we can determine the rate of change of the depended variable with changes in the independent variable. In the expression dy/dx, we measure the rate of change in variable y with changes in variable x.  

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