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Past Midterm Examination 2/2008


2952352 Mathematics for Economists II

PART A: Answer Questions 1-3 in YELLOW BOOKLET.

1. z = f ( x, y ) where

− z 2 + 3z ln x = x 2 y + yz + e 7 + ln 2
∂z ∂z
(a) Find and . (4 marks)
∂x ∂y
∂z ∂z
(b) If x = rs 2 − s and y = s 3 − 2r 2 s where r = 2 and s = 1 , find and given z = 1 .
∂r ∂s
(6 marks)

2. Find an equation of the least squares linear-regression line of y on x for the given data. In
addition, predict the value of y corresponding to x = 7 . (4 marks)

x 2 4 6 8 10
y 1.8 4.2 6.2 7.8 10

3. A company sells 2 products A and B with the demand functions as follows:


1
q A = 50 − pA
2
qB = 76 − pB

c = 3q A + 2q A qB + 2qB + 55
2 2
The total cost is
(a) Calculate the optimum profit and use the second derivative test to show that this
optimum maximises profit.
(10 marks)
(b) If the accountant made a mistake in the calculation of the total cost, the new total cost
c = 3q A + 2q A q B + 1.8q B + 55 ,
2 2
becomes
apply the envelop theorem to approximate the new maximum profit.
(3 marks)
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PART B: Answer Questions 4-5 in PINK BOOKLET.

4. For a three variable function

⎛1⎞ ⎛1⎞ ⎛1⎞


f ( x, y, z ) = 2 ln⎜ ⎟ + 3 ln⎜⎜ ⎟⎟ + ln⎜ ⎟
⎝ x⎠ ⎝ y⎠ ⎝z⎠
subject to the constraint
1
3x + 2 y −
=1
z
(a) Use the Lagrange multiplier method to find all critical point(s) of the function and the
corresponding minimum value(s) of the function f ( x, y, z ) .
(10 marks)

(b) Estimate the new optimum value(s) of the function f ( x, y, z ) if the constraint is changed to
1
3x + 2 y − = 1.1 .
z
(2 marks)

5. Use the extreme value theorem to find the absolute maximum point(s) for
⎛ 1⎞
h ( x, y ) = x 2 y ⎜ x − y − ⎟
⎝ 2⎠
1
subject to 1≤ x ≤ 2, y≥ and y ≤ x −1 .
2
(15 marks)

PART C: Answer Questions 6-7 in GREEN BOOKLET.

4 1
6. Find the maximum value of the utility function U = x 5 y 5

subject to the budget constraint 5 x + 3 y = 75 and additional constraint x − y 2 ≤ 7.8 .


(15 marks)

7. Find the maximum value of


f ( x, y ) = −5 x 2 + 80 x − y 2 + 32 y subject to − x − y ≤ −30, − x 2 ≤ −4 .
(19 marks)
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