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You only need to submit your answers to the …rst …ve questions Q.1-Q.5 for
grading.
3. Find all the local maxima and minima (if any) of the following functions, and determine
whether each local extremum is a global extremum.
4. Classify the stationary points (as local maximum, local minimum, or saddle points) of
(a) f (x1 ; x2 ; x3 ) = x21 + x22 + 3x23 x1 x2 + 2x1 x3 + x2 x3 ;
(b) f (x1 ; x2 ; x3 ; x4 ) = 20x2 + 48x3 + 6x4 + 8x1 x2 4x21 12x23 x24 4x32 :
5. Concepts.
(a) Suppose that f (x) is de…ned on a nonempty set S Rn . Suppose further that f (x)
has a unique local minimum point x in S. Do you agree with the following claim:
“Since f has only one local minimum point x , x must be the minimum point for
f in S.”? If yes, prove the claim; otherwise, provide a counterexample.
1
(b) Use the de…nition of strict concavity to show that: A strictly concave function (de-
…ned on a nonempty convex set) can have at most one maximum point. In other
words, a strictly concave function’s maximum point, if exists, must be unique. [Like-
wise, what’s the conclusion for a strictly convex function?]
where r and s are parameters. The value function f (r; s) = f (x (r; s); y (r; s); r; s) can
then be obtained. Verify the envelope theorem that
@f (r; s) @f (x ; y ; r; s) @f (r; s) @f (x ; y ; r; s)
= and = :
@r @r @s @s
(a) Show that f (x; y) = x2 y + x3 is homogeneous of degree 3. Find also the de-
gree of homogeneity of the Cobb-Douglas function f (x) = Ax1 1 x2 2 xnn , where
x1 ; : : : ; xn > 0, 1 ; : : : n and A are positive constants.
(b) Show that the …rst-order partial derivatives fi0 (x), i = 1; 2; : : : ; n, are homogeneous
of degree k 1.
(c) Show that the slope of the tangent line to the level curve is homogeneous of degree
0 for a function f (x; y) that is homogeneous of degree k.
(d) (Euler’s theorem) Suppose that f is a di¤erentiable function of n variables, de…ned
on an open cone D. Then, f is homogeneous of degree k in D if and only if
n
X
xi fi0 (x) = kf (x), for any x 2 D.
i=1
(More succinctly, x rf (x) = kf (x).). Hint: The “only if” direction is easier. For
the “if” direction, you may consider …xing x and de…ning a single-variable function
g(t) = t k f (tx) f (x), t 2 (0; +1). Then show that g 0 (t) = 0.)