Mathematics for Business and Economics 2017/18

Seminar 5 – Webinar (November 6 at 14:00)

Exercise 1
The production function of a company is
q
Q(, y) = y 3 ,

where  is the quantity of unskilled labor, and y is the quantity of skilled labor, both
measured in hours. At the moment the regime is three hours of unskilled labor and three
hours of skilled labor per day. Estimate the change in the daily production level, if
a) the quantity of the unskilled labor is increased by 0.5 hours;
b) the quantity of the skilled labor is decreased by 0.3 hours;
c) the quantity of the unskilled labor is increased by 0.5 and the quantity of the skilled
labor is decreased by 0.3 hours simultaneously.

Exercise 2
The production function of a company is

Q(K, L) = KLeK+2L−8 ,

where K is the capital input and L is the labor input. At the moment the company is using
two units of capital and three units of labor daily. The company wants to decrease the
daily input of capital by 0.7 units but keep the daily production unchanged. Estimate the
required change in the labor input.

Exercise 3
Peter’s daily needs are satisfied by drinking beer and smoking cigarettes. His utility
function is
U(, y) = 2 y 3 ,
where  is the amount of beer (in liters) consumed and y is the number of cigarettes
smoked per day. These days, Peter drinks one liter of beer and smokes ten cigarettes
per day. How can Peter maintain his level of satisfaction, if he has to reduce the smoking
to eight cigarettes per day due to lung problems?