An Analyst, Having Solved a Linear Programming Problem, Determined That

question 87

Multiple Choice

An analyst, having solved a linear programming problem, determined that he had 10 more units of resource Q than previously believed. Upon modifying his program, he observed that the list of basic variables did not change, but the value of the objective function increased by $30. This means that resource's Q's shadow price was

• A)$1.50.
• B)$3.00.
• C)$6.00.
• D)$15.00.
• E)$30.00.

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Definitions:

Active Macroeconomic Policy

Economic strategies implemented by the government or central bank to stabilize the economy by adjusting spending, taxes, and interest rates.

Expansionary Gap

A situation where the actual output in an economy is greater than the potential output due to high demand.

Nominal Wages

The amount of money an employee is paid before adjustments for inflation, reflecting the current value of money.

Real Wages

The purchasing power of wages, adjusted for inflation, showing how many goods and services can be bought with a unit of labor.