Mathematics for Economics

Mid-term Exam
prepared by: Muhammad Ryan Sanjaya
18 March 2021

Instructions:

• You have 3 hours to answer all questions. You should upload your answer to Simaster or
email me at m.ryan.sanjaya@ugm.ac.id before 22 March 2021 14:00 WIB

• Late submission will be penalised by 10 points reduction per 10 minutes (so a 30 minutes
late will reduce your grade by 30 points)

• Cheating will resulted in you receiving the final grade of F and will be reported
to the Dean.

1. (25 points) For this function

e2x + 2xy − y/x

(a) find the partial derivatives (w.r.t. x and y),

(b) form the Hessian matrix,
(c) check whether the function is homogeneous or not, and its degree of homogeneity (if
any).

2. (25 points) For this constrained optimisation problem (α and β are positive constants)

max xy subject to αx + βy = 10 and x/y = 3

(a) sketch the objective function and the constraints in a graph (y as the vertical axis, x as
the horizontal axis),
(b) find the values of x and y that maximises the objective function,
(c) find the value function V (α, β),
(d) find the value of V (1, 1).

1
3. (25 points) Find the simplest eigenvectors if we know the eigenvalues for this matrix are 6,
3, and -5.  
−2 −4 2
−2 1 2
4 2 5
√
4. (25 points) If we want to maximise xy subject to 100 − x − 2y ≥ 0 and x, y ≥ 0, check that
the solution x∗ , y ∗ > 0 is true using the Kuhn-Tucker conditions.

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