UNIVERSITY OF NAIROBI

THIRD YEAR EXAMINATIONS (CAT)

XEQ 301: MATHEMATIC FOR ECONOMICS II

DATE: JANUARY, 7 2022 TIME: 9.00 - 11.00 AM

INSTRUCTIONS

Answer QUESTION ONE OR QUESTION TWO

1.5 hours answering the question, last 30 minutes for submitting online
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Question One (30 Marks)

a) Find the definite integrals of the following functions (6 Marks)

(i) ʆ x(x2 +9)10 dx

(ii) ʆ xlnx dx

(iii) ʆ 20x3/(x4 +9) dx

(iv) ʆ 10xex dx

(v) ʆ x2(x3 +9)1/5 dx

b) You are given the following demand and supply functions (6 Marks)

Qd = 10 -0.4 P demand function

Qs = -1 + 0.9 P Supply function
(i) Find the consumer surplus
(ii) Find the producer surplus

c) The marginal cost of two firms are given by the following (6 Marks)

1) C’(Q) = 40 +20Q -5Q2 TC =200 when Q = 0

2) C’(Q) = 80e0.1Q TC= 600 when Q = 0
 (i) Find rhe total cost function C(Q) for each firm
(ii) Find the average cost function for each firm
(iii) What is the fixed cost for each firm

d) Find the time path of capital K(t) given the following rates of net investment flow functions
(6 Marks)
(i) I(t) = 10t1/2 K(0) = 500
(ii) I(t) = 18t3/5 K(0) = 40
(iii) I(t) = 30t1/4 K(0) = 60
(iv) For each of (i) to (iii), find the amount of capital formationover the interval {1,3]

e) Find the general and definite solutions of the difference equations (6 Marks)
i) Yt=1 + 5Yt= 10 y0 =0
ii) Yt=1 + 12Yt= 0 y0 =11
iii) Yt=1 + 0.2Yt= 3 y0 =9
iv) Yt=1 = -0.5Yt y0 =23

Question Two (30 Marks)

(a) Differentiate between the following terms (6 Marks)

(i) Homogenous and non-homogenous differential equations
(ii) Complementary and particular integral

(b) Find the general and definite solutions of the differential equations (6 Marks)
I) dy/dt + 6y=0 y(0) =12
II) dy/dt - 15y=12 y(0) =20
III) dy/dt + 0.2y= 8 y(0) =7
IV) dy/dt + 10y= 1/5 y(0) =0.5
V) 7dy/dt + 2y=0 y(0) =6

(c) Let the demand and supply functions for a given commodity be (6 Marks)
Qd =  -  p

Qs = - γ +  p

where (  ,  ,  ,  > 0) and Qd and Qs are quantity demanded and quantity supplied

(i) Assuming that the market is cleared at every point of time, find the time path P(t)
(general solution).
(ii) Does this market have dynamically stable intertemporal equilibrium price? Explain
(iii) What is the market clearing equilibrium price
(iv) State the role of the complementary function and particular integral in relation to the
equilibrium.

(d) Given the following differential equations, verify that they are exact differential equations and
solve them using the four-step procedure. (6 Marks)
 i) 2yt3dy + 3y2t2dt = 0
ii) 3y2tdy + (52 + y3t)dt = 0
iii) 4ytdy + (4t +2y2t)dt =0

(e) Given the following demand and supply functions for the cobweb model, find the intertemporal
equililibrium price and determine whether the equilibrium is stable. (6 Marks)

(i) Qdt =14 – 3P1 Qst = -5 + 3Pt-1

(ii) Qdt =11 – 2P1 Qst = -3 + Pt-1
(iii) Qdt =19 – 6P1 Qst = -7 + 5Pt-1