Slack Variables

question 75

Multiple Choice

Slack variables

• A) are always equal to zero.
• B) are usually negative.
• C) are always positive.
• D) can be positive or negative.

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Definitions:

Utility Function

A utility function is a mathematical representation of a consumer's preference structure, showing how different bundles of goods and services translate into levels of satisfaction or utility.

Exchange Equilibrium

Exchange equilibrium refers to a state in a market where the supply of goods is equal to the demand for goods, resulting in no excess supply or demand.

Perfect Competition

A market structure characterized by an infinite number of buyers and sellers, homogenous products, and no barriers to entry or exit, leading to price takers rather than price makers.

Efficiency

The ability to achieve a desired result or work output with minimum wasted effort or expense.