Mathematics for Business and Economics - Exam

Points
Exam date: August 28, 2020
1
Non-graphic calculator and one A4 sheet with formulas and other Enrolment Year
content are allowed. Time: 90 minutes. Good luck! • full-time 2
• part-time
Name and surname Registration number
3
4


Problem 1 (15 points)

2
Consider the demand function D(P) = (1 − P2 )eP .
a) (6) Find the price elasticity of demand.
b) (4) Find the price elasticity of demand at the price of 0.5. Interpret the result.
c) (5) Find the price at which the demand is unit elastic.

Solution
a)
2 2 2
D0 (P) = −2PeP + (1 − P2 )eP 2P = −2P3 eP
2
D0 (P)P −2P3 eP P 2P4
ED,P = = 2
=−
D(P) (1 − P2 )eP 1 − P2

b)
1
ED,P (0.5) = − ≈ −0.1667
6
1
Since |ED,P (0.5)| = 6
< 1, the demand is inelastic.
1
If the price P = 0.5 increases by 1 %, the demand decreases by approximately 6
%.

c) The function is unit elastic, when |Ey, | = 1. Since the demand is decreasing we
have ED,P < 0, so

2P4
|ED,P | = −ED,P = =1
1 − P2
2P4 = 1 − P2
2P4 + P2 − 1 = 0
Æ
2
−1 ± 12 − 4 · 2 · (−1)
P =
2·2
1
P2 = −1 or P2 =
2
Ç
1
The first solution is not possible, from the second we get P1,2 = ± 2
.
Since the price is nonnegative, the solution is
v
t1
u
P= ≈ 0,71.
2
Problem 2 (20 points)
Consider the function
1
. ƒ () =
 ln 
Find its domain, zeros, poles, the first derivative, extrema, intervals where it is
increasing or decreasing, and its range. What happens to the function value as
 → ∞? Sketch the graph of ƒ () in the given coordinate system.

Solution

ˆ Dƒ = (0, ∞) \ {1}.

ˆ Zeros: no zeros.

ˆ Poles: 1 = 0, 2 = 1.
1 + ln 
ˆ ƒ 0 () = − .
( ln )2
1
ˆ Extrema: ƒ 0 () = 0 =⇒ 1 + ln  = 0 =⇒ 3 = e
≈ 0.37, ƒ ( 1e ) = −e ≈ −2.72.
1 1
Since ƒ 0 () > 0 for  < e
and ƒ 0 () < 0 for  > e
, there is local maximum at
T( 1e , −e).

ˆ Increasing on (0, 1e ).

ˆ Decreasing on ( 1e , 1) ∪ (1, ∞).

ˆ lim ƒ () = 0.
→∞

ˆ Range: (−∞, −e] ∪ (0, ∞)

y
3


−2 −1 1 2 3 4 5

−1

−2

−3

−4
Problem 3 (15 points)
   
1 2 0 0 2 1
For the matrices A = and B = , solve the matrix equation
2 0 −1 −2 −3 −2

XAAT = 4X − B2 .

Solution
First we solve the equation algebraically:

X(AAT ) = 4X − B2
X(AAT ) − 4X = −B2
X(AAT − 4) = −B2
X = −B2 (AAT − 4)−1

We have      
2 2 1 2 1 1 0
B =B·B= · = =
−3 −2 −3 −2 0 1

1 2
 
2 0 
AT = 
0 −1
0 −2

1 2
 
   
T 1 2 0 0 2 0  5 2
A·A = · =
2 0 −1 −2 0 −1 2 9
0 −2
    
T 5 2 4 0 1 2
AA − 4 = − =
2 9 0 4 2 5

1
   
T −1 5 −2 5 −2
(AA − 4) = =
1 · 5 − 2 · 2 −2 1 −2 1
 
2 T −1 T −1 −5 2
X = −B · (AA − 4) = −(AA − 4) =
2 −1
Problem 4 (20 points)
20 % of persons infected with the virus are superspreaders. In contact with a superspreader,
you get infected with a probability of 30 %. In contact with an infected person who is not a
superspreader, you get infected with a probability of 10 %.
a) (5) Mary was in contact with one infected person. Find the probability she got infected.
b) (5) Mary tested positive. Find the probability she was in contact with a superspreader.
c) (5) Joe was in contact with two independent infected persons. Find the probability he
got infected.

d) (5) Joe tested positive. Find the probability that he got infected from both persons he
was in contact with.

Solution
a) Denote by M the event that Mary got infected. We are interested in P(M).
We use the formula for total probability. The hypotheses are:

ˆ H1 – the person is a superspreader =⇒ P(H1 ) = 0.2 and P(M|H1 ) = 0.3,

ˆ H2 – the person is not a superspreader =⇒ P(H2 ) = 0.8 and P(M|H2 ) = 0.1.

We have

P(M) = P(H1 )P(M|H1 ) + P(H2 )P(M|H2 ) = 0.2 · 0.3 + 0.8 · 0.1 = 0.14 = 14%.

b)
P(H1 )P(M|H1 ) 0.2 · 0.3 3
P(H1 |M) = = = ≈ 0.4286 = 42.86 %.
P(M) 0.14 7
c) Denote:

ˆ J – Joe got infected,

ˆ J1 – Joe got infected from the first person,

ˆ J2 – Joe got infected from the second person.

The events J1 and J2 are independent.

We have P(J1 ) = P(J2 ) = P(M) = 0.14 and J = J1 + J1 , so

P(J) = P(J1 ) + P(J2 ) − P(J1 · J2 ) = P(J1 ) + P(J2 ) − P(J1 )P(J2 ) =

= 0.14 + 0.14 − 0.142 = 0.2604 = 26.04 %.

d) Denote by JJ the event that Joe got infected from both persons.
We have JJ = J1 · J2 and we are interested in P(JJ|J).

P(JJ · J) P(JJ) P(J1 · J2 ) P(J1 )P(J2 ) 0.142 7

P(JJ|J) = = = = = = ≈ 0.0753 = 7.53%.
P(J) P(J) P(J) P(J) 0.2604 93