. Consider a situation where there is a cost that iseither incurred or not. It is incurred only if the valueof some random input is less than a specified cutoffvalue. Why might a simulation of this situation give avery different average value of the cost incurred thana deterministic model that treats the random input asfixed at its mean? What does this have to do with the“flaw of averages”?

. Consider a situation where there is a cost that iseither incurred or not. It is incurred only if the valueof some random input is less than a specified cutoffvalue. Why might a simulation of this situation give avery different average value of the cost incurred thana deterministic model that treats the random input asfixed at its mean? What does this have to do with the“flaw of averages”?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter2: Mathematics For Microeconomics

Section: Chapter Questions

Problem 2.16P

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Could I have some help deriving the solutions? I’m confused given that it isn’t a standard cobb Douglas function
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