mathematics for Economists M1 2021/22: lab session 13 pmaraner@unibz.

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newton’s method
Exercise 218. Apply Newton’s method graphically to find the approximate value
of a root of the function represented in the graph starting with x0 ' 2.65 (corre-
sponding to the black point). Evaluate the three iterates x1 , x2 and x3 .

y
In
1.0
general une

start
from ✗o

rifà
0.5

✗ K +1 = ✗
'

1
•
2 3 4 5 6
x
f Cxk)
-0.5

-1.0

f (x0 ) f (x1 ) f (x2 )

solution: x1 = x0 ' 0.68, x2 = x1 ' 1.81, x3 = x2 ' 1.49
f 0 (x0 ) f 0 (x1 ) f 0 (x2 )

Exercise 219. Consider the function

f = {(x, y) 2 (0, 1) ⇥ R | y = ln x + x 2}.

Give a reason why f has a root in the interval [1, 4]. Use Newton’s method to find
the approximate value of the the root starting with x0 = 1. Compute the three
iterates x1 , x2 and x3 .
solution: The function is continuous and since f (1) = 1 < 0 and f (4) = ln 4 + 2 > 0 (ln 4 is positive as 4 > 1) its graph must
f (1)
intersect the x axis in at least one point between 1 and 4. The derivative of f is f 0 (x) = x+1 so that x1 = 1 = 3 = 1.5,
x f 0 (1) 2
f (1.5) f (1.5567)
x2 = 1.5 = 1.5567, x3 = 1.5567 = 1.5572.
f 0 (1.5) f 0 (1.5567)

57
Exercise 220. Consider the cubic equation

2x3 + 5x2 x 2 = 0.

Give a reason why the equation has a solution in between 0 and 1. Use Newton’s
method to find the approximate value of a solution starting with
1. x0 = 0,
2. x0 = 1,
3. x0 = 1.
Compute the two iterates x1 and x2 .
solution: The function f (x) = 2x3 + 5x2 x 2 is continuous and since f (0) = 2 < 0 and f (1) = 4 > 0 it must have a root,

that correspond to a solution of the equation f (x) = 0, between 0 and 1. The derivative of f is f 0 (x) = 6x2 + 10x 1 so that 1.
f (0) f ( 2) 10 f (1) f (0.7333)
x1 = 0 = 2 and x2 = 2 = ' 3.333; 2. x1 = 1 = 11 ' 0.7333 and x2 = 0.7333 '
f 0 (0) f 0 ( 2) 3 f 0 (1) 15 f 0 (0.7333)
f ( 1) 3 f ( 0.6)
0.6554; 3. x1 = 1 = ' 0.6 and x2 = 0.6 ' 0.6066.
f 0 ( 1) 5 f 0 ( 0.6)

Exercise 221. Consider the equation

ex 2 = ln x + 1.

Give a reason why the equation has a solution in between 0 and 1. Use Newton’s
method to find the approximate value of a solution starting with x0 = 1. Compute
the three iterates x1 , x2 and x3 .
solution: The function f (x) = ex ln x 3 is continuous and since f (x) ! +1 as x ! 0+ and f (1) = e 3 < 0, it must have
0
a root, that correspond to a solution of the equation f (x) = 0, between 0 and 1. The derivative of f is f (x) = ex 1
x
so that
f (1) f (1.640) f (1.1423)
x1 = 1 ' 1.640, x2 = 1.640 =' 1.1423, and x3 = 1.1423 =' 1.1419.
f 0 (1) f 0 (1.640) f 0 (1.1423)

p
Exercise 222. Use Newton’s method to evaluate 2 with three-digit precision.
2
solution: The square root of 2 is a solution of the equation x = 2. We therefore consider the function f (x) = x2 2 and apply
f (1) f (1.5)
Newton’s method with x0 = 1. The derivative of f is f 0 (x) = 2x so that x1 = 1 = 1.5, x2 = 1.5 =' 1.4167,
f 0 (1) f 0 (1.5)
f (1.4167) f (1.4142) p
x3 = 1.4167 =' 1.4142, x4 = 1.4142 =' 1.4142. Therefore 2 ' 1.414.
f 0 (1.4167) f 0 (1.4142)

Exercise 223. Use Newton’s method to find the value of e with three-digit preci-
sion.
solution: The Euler’s number e is the solution of the equation ln x = 1. We therefore consider the function f (x) = ln x 1 and apply
0 1 f (3) f (2.704)
Newton’s method with x0 = 3. The derivative of f is f (x) = so that x1 = 3 = 2.704, x2 = 2.704 =' 2.7182,
x f 0 (3) f 0 (2.704)
f (2.7182)
x3 = 2.7182 =' 2.7183. Therefore e ' 2.718.
f 0 (2.7182)

58
The
fisiuoreasiyldecreasiyatxoifffkx.ba/fYx
function
)
. <0

iuoreasivgldeoreasiy iff
is
function f Idea
The in an interval I
) 01
f for all '

f' Ix > ✗ c- I

If / G) all
f for Df
'
Ix )
f' fis
0 that <0 ✗ c-
soy
> ma

monotona

iuoreasiy
increasing and decreasing functions
Exercise 224. Determine where f is increasing and where it is decreasing:
IN CREATING
for (9+0)
2
fkxo) 2X <
=

-90 )
1. f (x) = x DECREASNNG
IN creatina for L 3×2-1>0
f' ( ✗ D= 3×2-1 for × >
§
3 /
2. f (x) = x x
'DEOREA
1 '
l ✗ c)
ANG (-0 ¥) (fitta )
f f-
= ,
3. f (x) = + ln x > 0
-
+
x
x2
4. f (x) = xe 2

p p
3
solutions: 1. Increasing for x 2 (0, 1), decreasing for x 2 ( 1, 0) 2. Increasing for x 2 ( 1, 3
) [ ( 33 , 1), decreasing
p p
3 3
for x 2 ( 3
, 3
) 3. Increasing for x 2 (1, 1), decreasing for x 2 (0, 1) 4. Increasing for x 2 ( 1, 1), decreasing for

x 2 ( 1, 1) [ (1, 1).

convex and concave functions

Exercise 225. Determine where f is convex and where it is concave:

1. f (x) = x2

2. f (x) = x3 x
1
3. f (x) = + ln x
x
x2
4. f (x) = xe 2

solutions: 1. convex for x 2 R 2. convex for x 2 (0, 1), concave for x 2 ( 1, 0) 3. convex for x 2 (0, 2), concave for
p p p p
x 2 (2, 1) 4. convex for x 2 ( 3, 0) [ ( 3, 1), concave for x 2 ( 1, 3) [ (0, 3).

1. y 2. y 3. y 4. y
5 5 5 5

4 4 4 4

3 3 3 3

2 2 2 2

1 1 1 1

-5 -4 -3 -2 -1 1 2 3 4 5
x -5 -4 -3 -2 -1 1 2 3 4 5
x -5 -4 -3 -2 -1 1 2 3 4 5
x -5 -4 -3 -2 -1 1 2 3 4 5
x

-1 -1 -1 -1

-2 -2 -2 -2

-3 -3 -3 -3

-4 -4 -4 -4

-5 -5 -5 -5

59
Exercise 226. A real function is called a utility function if it is increasing and
concave. Decide if
p
a) f ✓ R+ ⇥ R given by f (x) = 3
x + 13 x + 3 and
x2
b) g ✓ R ⇥ R given by g(x) = e
is increasing, concave, a utility function. Use derivatives to make the decision and
indicate for each di↵erentiation which rule(s) you apply.
solutions: a) In order evaluate the first and second derivative of f we apply the constant factor rule, [cf (x)]0 = cf 0 (x), the sum

derivative rule, [f (x) + g(x)]0 = f 0 (x) + g 0 (x), and the power functions derivative rule, (xk )0 = kxk 1 : f 0 (x) = p
3
1 + 1
3
,
3 x2
f 00 (x) = p
3
2 . Since for all x 2 R+ f 0 (x) > 0 and f 00 (x) < 0 the function is increasing, concave and therefore a utility
9 x5
function. a) In order evaluate the first and second derivative of f we apply the constant factor rule, [cf (x)]0 = cf 0 (x), the chain rule
2 2
[f (g(x))]0 = f 0 (g(x))g 0 (x) and and the power functions derivative rule, (xk )0 = kxk 1 : g 0 (x) = 2xe x , g 00 (x) = (2 4x2 )e x .

The function is increasing for x < 0 and decreasing for x > 0, convex for x 2 ( 1, p1 ) [ ( p1 , +1) and concave elsewhere,
2 2

therefore not an increasing function nor a concave function, nor a utility function.

stationary points
Exercise 227. Find the stationary points of

1. f (x) = x3 3x 2. f (x) = x4 4x2 3. f (x) = 2

1 3 2 1 x
4. f (x) = x3 x + 2x 5. f (x) = 6. f (x) =
3 2 x2 + 1 x2 + 1

p
7. f (x) = 4 x2 8. f (x) = xex 9. f (x) = x ln x

x 3x
10. f (x) = e e
⇣ p ⌘ ⇣p ⌘ ⇣ ⌘ ⇣ ⌘
solutions: 1. ( 1, 2), (2, 1) 2. 2, 4 , (0, 0), 2, 4 3. (x, 2) for all x 2 R 4. 1, 5
6
, 2, 2
3
5. (0, 1) 6.
⇣ ⌘ ⇣ ⌘ ⇣ ⌘ ⇣ ⌘ ⇣ p ⌘
1, 12
, 1, 1
2
7. -
(0, 2) 8. 1, e1 1
9. e , e 1 10. ln23 , 2 9 3 .

Exercise 228. Find the value of the parameter k in such a way that
f (x) = x2
f' Ix ) = 2x K
-

kx + 2,
2X K =
G
has a stationary point at x = 2.
-

solution: k = 4. 4 = K

60