Which of the Following Cost Functions Exhibits Economies of Scope

question 31

Multiple Choice

Which of the following cost functions exhibits economies of scope over the specified output range?

• A) C(Q₁,Q₂) = 2 − 0.5Q₁Q₂ − (Q₁)² + (Q2)², for all Q₁ > 0 and Q₂ > 0
• B) C(Q₁,Q₂) = 2 − 3Q₁Q₂ − (Q₁)² + (Q2)², for all Q₁ > 0 and Q₂ > 0
• C) C(Q₁,Q₂) = 2 − 0.5Q₁Q₂ − (Q₁)² + (Q2)², for all Q₁ < 2 and Q₂ < 2
• D) C(Q₁,Q₂) = 2 − 3Q₁Q₂ − (Q₁)² + (Q2)², for all Q₁ > 4 and Q₂ > 4

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.