Exercise 7.1 (Alpha Chiang and K.

Wainwright)
1.

(a)

Find the derivative of each of the following functions:

y=x 12
dy
11
=12 x
dx

(b)

y=63
dy
=0
dx

(c)

y=7 x

dy
=35 x 4
dx

(d)

w=3 u1
dw 3
=
du u2

(e)

w=4 u 2
dw 2
=
du 4

(f)

1/ 4

w=4 u

dw 1
= 3
du
u4

2.

(a)

Find the following:

d
(x4 )
dx
4 x 5

4
5
x

(b)

d
9 x3
dx
3 x

3
x

(c)

2
3

2
3

d
5 w4
dw
20 w3

(d)

d
c x2
dx
2 cx

(e)

d
b
au
du
b1

ba u

(f)

d
a ub
du
ba ub1

3.

(a)

Find

f ' (1)

y=f ( x ) =18 x
f ' ( x )=18
f ' ( 1 )=18
f ' ( 2 )=18

(b)

y=f ( x ) =c x 3
f ' ( x )=3 c x 2

and

f ' (2)

from the following functions:

f ' ( 1 )=3 c (1 )
3c

f ' ( 2 )=3 c ( 2 )
6c

(c)

f ( x )=5 x2
'
3
f ( x )=10 x

f ' ( 1 )=10

( 11 )
3

10
f ' ( 2 )=10

( 21 )
3

5
=1.25
4
4

(d)

3
f ( x )= x 3
4
1

f ' ( x )=x 3

1
x
3

1
f ' ( 1 )= 3 =1
1
1
'
f ( 2 )= 3 =0.7937
2

(e)

f ( w )=6 w 3
'

f ( w )=2 w

2
3

2
3

'

f ( 1 )=2(1) =0.63
2

f ' ( 2 )=2(2) 3
1.26

(f)

f ( w )=3 w

f ' ( w )=w

1
6

7
6

f ' ( 1 )=1 6 =1
'

7
6

f ( 2 )=2 =0.4454

Problems (Christopher Snyder and Walter Nicholson)

2.1

Suppose

a.

Calculate

U ( x , y )=4 x +3 y
U
x

and

U
y

U d
= ( 4 x 2 +3 y 2)
x dx
8 x
U d
= ( 4 x 2 +3 y 2 )
y dy
6 y

b.

Evaluate these partial derivatives at x=1, y=2

U
=8 (1 ) =8
x
U
=6 ( 2 )=12
y

c.

Write the total differential for U

dU =

dU
dU
dx+
dy
dx
dy

8 xdx+ 6 ydy
d.

Calculate

dy
dx

for dU= 0, that is the implied trade-off

between x and y holding U constant?

du=10

8 x dx +6 y dy=0
6 y dy=8 x dx

dy 8 x
=
dx 6 y

e.

4x
3y

Show U = 16, when x = 1, y = 2

U ( x , y )=4 x 2+3 y 2

U ( 1,2 )=4 ( 1 )2 +3 ( 2 )2
16
f.

In what ratio must x and y change to hold U constant at 16

for movements away from x = 1, y = 2?
dy 4 x
=
dx 3 y
Substitute x=1 and y=2 into dy/dx
dy 4 (1)
=
dx
3 (2)

2
3

2
is needed hold U constant
y

g.

More generally, what is the shape of U = 16 contour line for

this function? What is the slope of the line?

2.2 Suppose a firms total revenues depend on the amount

produced (q) according to the function
Total costs also depend on q:
a.

R=70 qq 2

C=q +30 q +100

What level of output should the firm produce to maximise profits (RC)? What profits will be?
=RC

70 qq2( q2 +30 q+ 100 )

70 qq2q230 q100

2q + 40 q100
d
=4 q +40
dq
d
=0
dq
4 q +40=0
4 q=40

q=10
The firm should produce at thelevel of q=10, maximize profit

( 10 )=2 ( 10 )2 +40 ( 10 ) 100

200+400100
100

( 10 )=100 is themaximum profit that canbe achieved

b.

Show that the second-order conditions for a maximum are satisfied

at the output level found in part (a).

SOC:
2

d
=4< 0
d2 q
Since the valueis less than zero , thusit is theminimum point
c.

Does the solution calculated here obey the marginal revenue

equals marginal cost rule? Explain.
MR=

dR
=702q
dq

Let q=10

MR=702 ( 10 )=50
MC=

dc
=2 q+ 30
dq

MC=2 ( 10 ) +30=50
MR=MC . It shows that MR is at equilibrium MC

2.7

Consider the following constrained maximization problem:

Maximize

y=x 1 +5 ln x2

Subject to

k x1 x2 =0 ,

Where k is a constant that can be assigned any specific value.

a.

Show that if k = 10, this problem can be solved as one evolving only
equality constraints.

First, set up logrengan expression

L=x 1+ 5 ln x 2 +( kx 1x 2 )
L 5
= =0
x2 x2
dL
=kx 1x 2=0
d
We get ,

=1
5
=
x2
5
=1
x2
x 1=5
x 1+ x 2=10
x 1+5=10
x 1=5

b.

Show that solving this problem for k = 4 requires that

x 1 = -1

Let = x 1+5 ln x 2 + ( k x 1x 2)
Let k = 4
L=x 1+ 5 ln x 2 + ( 4x 1x 2)
Then,
L
=1+ ( )=1x=0
(1)
x1
L 5
= =0
..(2)
x2 x2
L
=4x 1x 2 (3)
x2
Solve (1) to get

=1

5
=
x2
5
=1
x2
x 2=5

Sub x 2 =5 into (3)

45x 1=0
1x1 =0
x 1=1

c.

If the xs in this problem must be non-negative, what is the optimal

solution when k=4?
If the condition for

x1 0

and

x 2 0 , then for k = 4, suppose that

x 1> 0 . Thus, the optimal solution is

x 2=4

and

0.

d.

What is the solution for this problem when k=20? What do you
conclude by comparing this solution with the solution for part (a)?
If k = 20, when
Because

x 2=5

based on part (a), thus

x 1=15.

Why?

x 2 is a diminishing marginal investment in y, whereas

x 1 does not. All optional solutions require that,

extra will affect x 1 .

x2

reaches 5, any