Econ 415/615 Mathematics for Economists Lau

Problem Set I Fall 2021

One-variable calculus
1) Find the first and second derivatives of the following functions:
a) y = f ( x) = 3x5 − 2 x0.2
ln( x + 1)
b) y = f ( x) =
x
−3
c) y = f ( x) = x + ax2 − e2 x
d) y = f ( x) = 2x2 ( x−2 + ax0.5 ) = 2 + 2ax2.5
x2 − 2
e) y = f ( x) =
4x
f) y = f ( x) = ( x2 − ax)( x3 − bxc ) = x5 − ax4 − bx2+c + abx1+c
g) y = f ( x) = a( x + 1)2
h) y = f ( x) = a ln( x2 + 1)2 = 2a ln( x2 + 1)
i) y = f ( x) = axb − cx3
ax
j) y = f ( x) =
bx + c
k) y = f ( x) = (axb + 3)(cx3 − 2) = acxb+3 + 3cx3 − 2axb − 6
l) y = f ( x) = a( x + 4)e2 x

2) Find the optimum of

a) f ( x) = x 2 − 2 x
b) f ( x) = x3 − 4x2 + x − 2
1
x
c) f ( x) = x 2 − , x  [0,3]
2
1
x
d) f ( x) = x 2 − , x  [4,6]
2
7 x2
e) f ( x) = x 3 − + x − 1, x [0, 2]
4
7 x2
f) f ( x) = x 3 − + x − 1, x [4, 6]
4
[Make sure you check the second order condition and determine whether it is a maximum
or minimum.]

3) Consider a profit-maximizing perfect competitive firm, let the price of the output (P) be $5,
calculate the profit-maximizing output and the level of profit for the following total cost
function:
a) TC(Q) = 50 + 5Q2
b) TC(Q) = 50 + 5Q2 + Q3
[Make sure you check the second order condition.]

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4) Consider a profit-maximizing monopoly, let the demand function be D : P = 10 − Q , calculate
the profit-maximizing output for the following total cost function:
TC(Q) = 5 + Q + 5Q2
[Make sure you check the second order condition.]

5) Given a downward sloping demand curve, determine the condition that marginal revenue curve
is downward sloping.

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Econ 415/615 Mathematics for Economists Lau
Problem Set I: Solution

1a) y = f ( x) = 3x5 − 2x0.2  f '( x) = 15x4 − 0.4x−0.8  f "( x) = 60x3 + 0.32x −1.8

ln( x + 1)
b) y = f ( x) =
x
d ln( x + 1) dx 1
x − ln( x + 1) x − ln( x + 1)
dx dx x + 1 1 ln( x + 1)
 f '( x) = = = −
x 2
x 2
x( x + 1) x2
d ln( x + 1) dx 2
x2 − ln( x + 1)
d ( x + 1) −1 dx −1 dx dx
 f "( x) = x −1 + ( x + 1) −1 −
dx dx ( x 2 )2
1
x2 − ln( x + 1)2 x
= x −1 (−1)( x + 1) −2 + ( x + 1) −1 (−1) x −2 − x +1
x4
1 1 1 2 ln( x + 1) 1 2 2 ln( x + 1)
=− − 2 − 2 + =− − 2 +
x( x + 1) 2
x ( x + 1) x ( x + 1) x 3
x( x + 1) 2
x ( x + 1) x3

1c) y = f ( x) = x−3 + ax2 − e2 x

d (2 x)
 f '( x) = −3x −4 + 2ax − e2 x = −3x −4 + 2ax − 2e2 x
dx
−5
 f "( x) = 12 x + 2a − 4e 2x

1d) y = f ( x) = 2x2 ( x−2 + ax0.5 ) = 2 + 2ax2.5

 f '( x) = 5ax1.5  f "( x) = 7.5ax0.5

x2 − 2
e) y = f ( x) =
4x
d ( x 2 − 2) d (4 x)
4x − ( x 2 − 2)
dx = 4 x(2 x) − ( x − 2)4 = 8 x − 4 x + 8 = 4 x + 8 = 1 + 1
2 2 2 2
 f '( x) = dx
(4 x) 2 16 x 2 16 x 2 16 x 2 4 2 x2
1 1
 f "( x) = 0 + (−2) x −3 = − 3
2 x

1f) y = f ( x) = ( x2 − ax)( x3 − bxc ) = x5 − ax4 − bx2+c + abx1+c

 f '( x) = 5 x 4 − 4ax3 − b(2 + c) x1+ c + ab(1 + c) x c
 f "( x) = 20 x3 − 12ax 2 − b(2 + c)(1 + c) x c + abc(1 + c) x c −1

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1g) y = f ( x) = a( x + 1)2
 f '( x) = 2a( x + 1)  f "( x) = 2a

1h) y = f ( x) = a ln( x2 + 1)2 = 2a ln( x2 + 1)

1 d ( x 2 + 1) 2a 4ax
 f '( x) = 2a 2 = 2 (2 x) = 2
x + 1 dx x +1 x +1
d (4ax) d ( x + 1)
2
( x 2 + 1) − (4ax)
dx dx ( x 2 + 1)(4a) − (4ax)(2 x) 4ax 2 + 4a − 8ax 2
 f "( x) = = =
( x 2 + 1) 2 ( x 2 + 1)2 ( x 2 + 1)2
4a − 4ax 2
=
( x 2 + 1) 2

1i) y = f ( x) = axb − cx3

 f '( x) = baxb−1 − 3cx2  f "( x) = ba(b − 1) xb−2 − 6cx

ax
1j) y = f ( x) =
bx + c
d (ax) d (bx + c)
(bx + c) − (ax)
dx dx a(bx + c) − abx ac
 f '( x) = = =
(bx + c) 2
(bx + c) 2
(bx + c) 2
d (bx + c) 2abc
 f "( x) = ac(−2)(bx + c) −3 =−
dx (bx + c)3

1k) y = f ( x) = (axb + 3)(cx3 − 2) = acxb+3 + 3cx3 − 2axb − 6

 f '( x) = ac(b + 3) xb + 2 + 9cx 2 − 2abxb −1
 f "( x) = ac(b + 2)(b + 3) x b +1 + 18cx − 2ab(b − 1) x b − 2

1l) y = f ( x) = a( x + 4)e2 x
de 2 x d ( x + 4)
 f '( x) = a[( x + 4) + e2 x ] = a[2( x + 4)e 2 x + e 2 x ] = a (2 x + 9)e 2 x
dx dx
d (e 2 x ) d (2 x + 9)
 f "( x) = a[(2 x + 9) + e2 x ] = a[2(2 x + 9)e 2 x + 2e 2 x ] = a(4 x + 20)e 2 x = 4a( x + 5)e 2 x
dx dx

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2a) optimize f ( x) = x 2 − 2 x
x
FONC: f '( x) = 2x − 2 = 0  x* = 1
SOSC: f "( x) = 2  0 (minimum)

2b) optimize f ( x) = x3 − 4 x 2 + x − 2
x

−(−8)  (−8)2 − 4(3)(1) 8  52 4 + 13 4 − 13

FONC: f '( x) = 3x − 8 x + 1 = 0  x* =
2
= = or
2(3) 6 3 3
SOSC:
f "( x) = 6 x − 8
4 + 13 4 + 13 4 + 13
x1* =  f "( ) = 6( ) − 8 = 8 + 2 13 − 8 = 2 13  0 (minimum)
3 3 3
4 − 13 4 − 13 4 − 13
x2 * =  f "( ) = 6( ) − 8 = 8 − 2 13 − 8 = −2 13  0 (maximum)
3 3 3
−b  b2 − 4ac
Note that ax 2 + bx + c = 0  x* =
2a

1
x
2c) optimize f ( x) = x −2
x  [0,3]
x 2
1 − 12 1 −
1
FONC: f '( x) = x − = 0  x 2 − 1 = 0  x* = 1 [0,3]
2 2
1 1 −3 1 −3 1
SOSC: f "( x) = (− ) x 2 = − x 2  f "(1) = −  0 (maximum)
2 2 4 4

1
x
2d) optimize f ( x) = x 2 − x  [4,6]
x 2
From 2c), we know that the critical point of this function is at x = 1 , which is not in the domain
x [4,6] .
1 − 12 1 1  1 
Also since f '( x) = x − =  − 1  0 for x  [4, 6] , i.e. f ( x) is a downward sloping
2 2 2 x 
function, hence the maximum must be x* = 4 and the minimum must be x* = 6

7 x2
2e) optimize f ( x) = x3 − + x −1
x 4
7 −(−7)  (−7) 2 − 4(6)(2) 7  1 2 1
FONC: f '( x) = 3x 2 − x + 1 = 0  6 x 2 − 7 x + 2 = 0  x* = = = or
2 2(6) 12 3 2
7
SOSC: f "( x) = 6 x −
2

1 1 1 7 −1 2 2 2 7 1
x1* =  f "( ) = 6( ) − =  0 (maximum) x2 * =  f "( ) = 6( ) − = +  0 (minimum)
2 2 2 2 2 3 3 3 2 2

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 7 x2
2d) f ( x) = x 3 − + x − 1, x [4, 6]
4
7
From c) we know that we will not have an interior solution. Note that f '( x) = 3x 2 − x + 1  0, x [4, 6]
2
[draw the diagram]  4(min) and 6(max)

3a) max  = 5Q − [50 + 5Q 2 ] = −50 + 5Q − 5Q 2

Q

d 1
FONC:  '(Q) = = 5 − 10Q = 0  Q* =
dQ 2
d 2
SOSC:  "(Q) = 2 = −10  0 (maximum)
dQ

3b) max  = 5Q − [50 + 5Q 2 + Q 3 ] = −50 + 5Q − 5Q 2 − Q 3

Q

d
FONC:  '(Q) = = 5 − 10Q − 3Q 2 = 0  3Q 2 + 10Q − 5 = 0
dQ
−(10)  (10)2 − 4(3)(−5) −10  160 −5 + 40 −5 − 40
 Q* = = = or (impossible)
2(3) 6 3 3
d 2
SOSC:  "(Q) = = −10 − 6Q
dQ 2
−5 + 40 d 2 −5 + 40
Q* =  2
= −10 − 6Q = −10 − 6( ) = −10 + 10 − 2 40 = −4 10  0 (maximum)
3 dQ 3

4) Problem max  = (10 − Q)Q − (5 + Q + 5Q 2 ) = 10Q − Q 2 − 5 − Q − 5Q 2 = −5 + 9Q − 6Q 2

Q

FONC:
d
= 9 − 12Q = 0  Q* = 0.75
dQ

SOSC:
d 2
= −12 (maximum)
dQ 2

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5) Let the demand curve be P(Q), P '  0

dTR dP (Q )Q
TR = P (Q )Q  MR = = = P (Q ) + QP '(Q )
dQ dQ
dMR d  P(Q) + QP '(Q ) 
slope of MR curve = = = P '+ (QP "+ P ') = QP "+ 2 P '
dQ dQ
dMR
if the demand curve is linear, i.e. P " = 0, then = 2 P '  0, MR curve downward sloping
dQ
dMR
if P "  0, then  0, MR curve downward sloping
dQ
dMR
if P "  0 (very positive), then  0, MR curve upward sloping
dQ

P"  0

P" = 0

P"  0