What are the different steps involved in optimization in differences?
What will be an ideal response?
Optimization in differences has three steps:
a) Translate all costs and benefits into common units, like dollars.
b) Calculate the marginal consequences of moving between alternatives.
c) Apply the Principal of Optimization at the Margin by choosing the alternative with the property that moving to it makes you better off and moving away from it makes you worse off.
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The monetary policies carried out by the Fed
A. must be ratified by Congress. B. must be consistent with fiscal policies passed by Congress. C. are sometimes inconsistent with fiscal policy. D. must be approved by the president.
The average product of capital of producing 2,991 units of output (find point B) in the table below is:Production Function for Good XL*KQMPK=(?Q/?K)APK=(Q/K)LaborCapitalOutputMarginal Product of CapitalAverage Product of Capital900----910575.75.7092032426.716.2093065733.3B9401,07241.526.809501,52445.230.489601,97645.232.939702,39141.534.169802,72433.334.059902,991A33.2391003,0485.730.4891103,016-3.227.4291202,945-7.124.54
A. 73. B. 21.9. C. 37. D. 11.1.