economics terms

Concave Function

A function f() is strictly concave if, for any positive weights w1 and w2 such that w1 + w2 = 1, then

        w1f(a1) + w2f(a2) < f( w1a1 + w2a2 ).

Two common examples are the log function y = log(x) and the square root function y = √x.

See also convex function.


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Economics Terms

Arbitrage Pricing
Arbitrage Profit
Average Cost
Balance of Payments
Budget Constraint
Call Option
Concave Function
Consumer Surplus
Consumption Function
Convex Function
Deadweight Loss
Demand Curve
Econometrics
Economic Agent
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Economics
Economics Textbook
Elasticity
Endogenous
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Expectations Hypothesis
Federal Funds (Fed Funds) Rate
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Indifference Curve
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Jensen's Inequality
Macroeconomics
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Microeconomics
Monopoly
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Perfect Competition
Phillips Curve
Price Elasticity
Producer Surplus
Production Function
Production Possibility Frontier
Put Option
Recession
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Risk Aversion
Structural Unemployment
Substitution Effect
Supply Curve
Taylor Rule
Technological Growth
Term Structure
Theory of the Consumer
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Unemployment Rate
Utility Function
Velocity of Money
Widget
Yield Curve