Department of Agricultural Economics

Course of Mathematics for Economist

Course code AgEc311

Worksheet 1

General instruction

Practices it !!!!!!

Do all the following question briefly and clearly ?

1# Do you need to invest more than birr10,000 now if you wish to have birr 65,000 in 15 years’
time and you have a deposit account which guarantees 14%?

2# For how long must £5,000 be kept in a deposit account paying 8% interest before it
accumulates to £7,500?

3#Differetiate and relate briefly Saving , Interest rate and Loan ?

4# As we now ,each of have parents ,grand -parents ,great- grand parents ,great -great
grandparents and so on ,what is the total sum of such parents you have from your parents to the
tenth grandparents ?

5# A women started a business by birr of 3000 .she left lost 100 birr in the first month and 60
birr second months and so on ,assuming that this improvement continued at the same
rate .determine the total capital in 2 years and 7 months .

6# An investment project involves an initial outlay of £25,000 and net annual returns as follows:
£6,000 at the end of year 1 birr 8,000 at the end of year 2 birr 8,000 at the end of year 3 birr
10,000 at the end of year 4 birr6,000 at the end of year 5 Interest rates are currently 15% but are
forecast to fall to 12% next year and 10% the following year. They will then rise by 1 percentage
point each year. Is the project worthwhile?
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7# For the production function Q = 20K0.5L0.5 derive a two-variable function in the form K =
f(L) for the isoquant Q = 100.

8# Assume that a firm can sell as many units of its product as it can manufacture in a month at
birr 18 each. It has to pay out birr 240 fixed costs plus a marginal cost of birr 14 for each unit
produced. How much does it need to produce to break even?

9# A manufacturer can produce radios at a cost of birr 10 apiece and estimates that if they are
sold for x birr a piece, consumers will buy approximately 80-x radios each month.

a) Express the manufacturer’s monthly profit as a function of the price x, and

b) Graph this function.

2|Page DO YOUR BEST!! 22/12/2021