ECON 104: Mathematics for Economics

The Take-Home Midterm Examination

Fall 2021, SMU School of Economics
Instructor: Takashi Kunimoto

It starts at 18:00 on Sep 30 (Thu), 2021 and ends at 18:00 on

Oct 1 (Fri), 2021 (24 hours)

• Collaborations in any form are disallowed. You must work on

this exam alone.

• You must submit your work on the exam in pdf file on “Assignments”
section on eLearn by 18:00 on Oct 1 (Fri), 2021.

• The estimated time to finish this exam is 2 hours.

• Please check your email frequently during the exam period be-
cause I might send you email regarding the exam.

• The pdf file name of your work must be as follows: “ECON104-Fall2021-

G1-Midterm-Exam-for-Takashi-KUNIMOTO.” Of course, you need to re-
place “Takashi-KUNIMOTO” with your own name. If you belong to G2,
you must replace “G1” with “G2” in the file name.

• You are fully responsible for making the quality (or visibility) of the file as
good as it can be. Once you uploaded the file on eLearn, you must
double-check whether you can open it and you uploaded the
right file which contains all the answers for the exam. Making
sure all these points is entirely your responsibility.

• There are 5 big questions;

• Some of big questions contain multiple small questions;

• Answer all questions;

• Show all your work;

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 • Explicitly make assumptions whenever you think they are needed;

• The total score of the exam is 100 points;

• This exam comprises 6 pages, including this cover page;

• Good Luck!

Question 1 (20 points) Let f : R2 → R be the following function: for all

(x, y) ∈ R2 , (
xy(x2 −y 2 )
x2 +y 2
if (x, y) 6= (0, 0)
f (x, y) =
0 if (x, y) = (0, 0)
Answer the following questions.
0 0
1. (4 points) Derive f1 (x, y) and f2 (x, y).
00 00
2. (4 points) Derive f12 (x, y) and f21 (x, y).
00 00
3. (2 points) Find the expression for f12 (x, 0) and f12 (0, y), respectively.
00 00
4. (2 points) Find the expression for f21 (x, 0) and f21 (0, y), respectively.
00 00
5. (3 points) Are f12 (x, y) and f21 (x, y) continuous? Justify your answer.

6. (5 points) What is the relevance of Young’s theorem in this question?

Provide your argument.

2
Question 2 (15 points) Let F (x1 , x2 ) be a twice differentiable function from
0
R2 → R. We denote by F1 (x1 , x2 ) the partial derivative of F (x1 , x2 ) with
0
respect to x1 and by F2 (x1 , x2 ) the partial derivative of F (x1 , x2 ) with respect
to x2 . Suppose that we are given the following equation system:
0
(i) F1 (x1 , x2 ) = λp1
0
(ii) F2 (x1 , x2 ) = λp2
(iii) p1 x1 + p2 x2 = w.

Suppose that the above equation system defines x1 , x2 , and λ as differentiable

functions of p1 , p2 , and w. In other words, we consider x1 , x2 , and λ as depen-
dent variables and p1 , p2 , and w as independent variables. Find an expression
for ∂x1 /∂p1 . You are required to provide the whole process of deriving your
answer.

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Question 3 (25 points) Consider the following matrix:
 
4 2 −4
A =  1 4 −3  .
1 1 0

Answer the following questions

1. (4 points) Let r ∈ R and I denote the 3 × 3 identity matrix. Compute

|A − rI|.

2. (3 points) Show that there are only two solutions of r to the equation
|A − rI| = 0 and find these solutions explicitly.

3. (4 points) In the rest of the question, we denote by r1 , r2 ∈ R the two

solutions to the equation |A − λI| = 0 such that r1 < r2 . Find a column
vector (or, 3×1 matrix) x 6= 0 such that (A−r1 I)x = 0, where 0 denotes
the column vector (or, 3 × 1 matrix) of zeros. Justify your answer.

4. (4 points) Find a column vector (or 3 × 1 matrix) y 6= 0 such that

(A − r2 I)y = 0. Justify your answer.

5. (5 points) Find a column vector (or, 3 × 1 matrix) z 6= 0 such that

(A − r2 I)z = y and y and z are not parallel to each other. Justify your
answer.

6. (5 points) Let  
x1 y1 z1
P = (x y z) =  x2 y2 z2 
x3 y3 z3
be the 3 × 3 matrix constructed from (x, y, z) which you have obtained in
the previous parts of the question. Compute P −1 AP . You are required
to leave the whole process of the derivation of P −1 AP .

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Question 4 (15 points) Let f be defined for all x ∈ D = (0, ∞) by

x + 1 if x ∈ (0, 1]
f (x) =
1 if x ∈ (1, ∞)

Answer the following questions.

1. (3 points) Prove that f attains the maximum and minimum values.

2. (3 points) Is f continuous? Justify your answer.

3. (3 points) Are the conditions for the extreme value theorem satisfied?
Justify your answer.

4. (6 points) What is the relevance of the extreme value theorem in this

question? Provide your argument.

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Question 5 (25 points) Let f : R → R be a function such that f (x) =
2
(2x2 + a)e−x −a for all x ∈ R, where a is a constant satisfying a ≥ 0. Answer
the following questions.

1. (8 points) Find all stationary points of f .

2. (2 points) Determine limx→∞ f (x) and limx→−∞ f (x).

3. (7 points) Show that f has a (global) maximum point for each possible
value of a ≥ 0. Find also the (global) maximum value of f for each
possible value of a ≥ 0.

4. (8 points) For what value of a ≥ 0, does the (global) maximum value of

f have its largest value? Justify your answer.