A Shadow Price Reflects Which of the Following in a Maximization

question 107

Multiple Choice

A shadow price reflects which of the following in a maximization problem?

• A) marginal cost of adding additional resources
• B) marginal gain in the objective that would be realized by adding one unit of a resource
• C) net gain in the objective that would be realized by adding one unit of a resource
• D) marginal gain in the objective that would be realized by subtracting one unit of a resource
• E) expected value of perfect information

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Definitions:

Closed System

A physical system that does not allow certain types of transfers (such as transfer of mass) in or out of the system.

Structural Mobility

The mobility of individuals or groups within or between social strata, facilitated by changes in the economy or the social structure of a society, rather than by personal achievement.

Social Class Ladder

A metaphorical representation of the stratification and hierarchical nature of society based on socio-economic status.

Societal Changes

Alterations in the social structures, institutions, and patterns of behavior within a society over time.