5. Marginal versus average effects Consider the nonlinear function shown by the blue curve on the following graph. The grey line is tangent to this curve at point A. Use the grey line (star point) to answer the following question. (Note: You will not be graded on your placement of this line.) > 10 9 8 7 A 6 4 3 2 1 Tangent Line f(x) 0+ + + + + + 0 1 2 3 4 5 6 7 8 9 10 X The marginal effect of X on Y at point A is The average effect of X on Y at point A is True or False: For this graph, the marginal effect decreases as X increases. True False Scratch Line (?)
5. Marginal versus average effects Consider the nonlinear function shown by the blue curve on the following graph. The grey line is tangent to this curve at point A. Use the grey line (star point) to answer the following question. (Note: You will not be graded on your placement of this line.) > 10 9 8 7 A 6 4 3 2 1 Tangent Line f(x) 0+ + + + + + 0 1 2 3 4 5 6 7 8 9 10 X The marginal effect of X on Y at point A is The average effect of X on Y at point A is True or False: For this graph, the marginal effect decreases as X increases. True False Scratch Line (?)
ChapterA: Working With Diagrams
Section: Chapter Questions
Problem 2QP
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