For the Quadratic Equation = B₀ + B₁x

question 11

Multiple Choice

For the quadratic equation = b₀ + b₁x + b₂x², which of the following expressions must be zero in order to minimize or maximize the predicted y?

• A) b₁ + 2b₂x
• B) 2b₁ + b₂x
• C) -b₁/2b₂
• D) -b₂/2b₂

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Definitions:

Substitution

The economic principle where consumers replace more expensive items with less costly alternatives, or when firms swap higher-priced inputs with cheaper resources.

Income Effect

The change in consumption resulting from a change in real income.

Total Utility

The overall satisfaction or benefit a consumer receives from consuming a certain quantity of a good or service.

Indifference Curve

A graph that represents different combinations of two goods or services among which a consumer is indifferent, meaning they have no preference for one combination over another, all providing the same level of utility.