Question
Economics Question on Correlation and regression of two variables
A function is strictly concave in the interval I, if for all a,b ∈ I and λ ∈ (0,1)
A
f[(1-λ)a+λb] > (1-λ)f(a)+λf(b)
B
f[(1-λ)a+λb] < (1-λ)f(a)+λf(b)
C
f[(1-λ)a+λb] ≥ (1-λ)f(a)+λf(b)
D
f[(1-λ)a+λb] ≤ (1-λ)f(a)+λf(b)
Answer
f[(1-λ)a+λb] > (1-λ)f(a)+λf(b)
Explanation
Solution
The correct answer is (A) : f[(1-λ)a+λb] > (1-λ)f(a)+λf(b)