Three decision makers have assessed utilities for the following decision problem (payoff test in dollars): The indifference probabilities are as follows: a. Plot the utility function for money for each decision maker.b. Classify each decision maker as a risk avoider, a risk taker, or risk...
John Dunn owns The Country Store, a small retail store. He uses a combination journal with the following columns. Instructions Use the form provided in your working papers. For each of the following selected transactions, indicate in which column(s) of the combination journal the debit and credit...
Leah Friend is trying to decide which of two different kinds of candy to sell in her retail candy store. One type is a name brand candy that will practically sell itself. The other candy is cheaper to purchase but does not carry an identifiable brand name. Ms. Friend believes that she will have to...
In general, an increase in salvage value, ________ and an increase in the interest rate _____ the present worth of a project. a. Increases, decreases b. Does not affect, decreases c. Decreases, increases d. Increases, increases e. Decreases, decreases
THEOREM 2 Second-Derivative Test for Local Extrema
If
1. z = f(x, y)
2. fx(a, b) = 0 and f(a, b) = 0 [(a, b) is a critical point]
3. All second-order partial derivatives of fexist in some circular region containing
(a, b) as center.
4. A = f(a, b),
B = fxy(a, b), C = fyy(a, b)
Then
Case 1. If AC -
-
Case 2. If AC -
B² > 0 and A < 0, then f(a, b) is a local maximum.
B² 0 and A > 0, then f(a, b) is a local minimum.
B² < 0, then fhas a saddle point at (a, b).
Case 3. If AC
=
Case 4. If AC
-
B² = 0, the test fails.