For a Maximization Problem, the Optimistic Approach Often Is Referred

question 40

Multiple Choice

For a maximization problem, the optimistic approach often is referred to as the __________ approach.

• A)minimin
• B)maximin
• C)minimax
• D)maximax

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Definitions:

Marginal Propensity

The fraction of an additional unit of income that is spent on consumption rather than being saved.

Consumption Function

The relationship in the economy between consumption and income, other things constant.

Saving Function

The relationship between the level of saving and the level of income, typically showing that saving increases as income increases.

Consumption Function

An economic formula that expresses the relationship between total consumption and gross national income, indicating how much households are likely to spend.