Suppose the Cost of Producing Two Goods,x and Y,can Be

question 71

Multiple Choice

Suppose the cost of producing two goods,x and y,can be represented as C = ax + by + cxy.If there are economies of scope,then which of the following must be true?

• A) c > 0
• B) a + b = -c
• C) c = 0
• D) c < 0

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Definitions:

Investment

The allocation of resources, such as capital, time, or effort, in hope of generating a gain or profit in the future.

Fat Tails

Refers to the occurrences of extreme movements in stock prices or higher than normal risks in investments, which lead to heavy tails in a probability distribution.

Kurtosis

Measure of the fatness of the tails of a probability distribution. Indicates probability of observing extreme high or low values.

Skewness

A measure of the asymmetry of the probability distribution of a real-valued random variable about its mean.