Problem 1 (14 Points 3 + 2 +4 + 5) : X FX X

University of Amsterdam Final test
Faculty of Economics and Business Mathematics

Department of Quantitative Economics October 22, 2013 09:00–12:00 h
- You must give solutions completely in detail, not just answers.

- During the test the hand-out of the formula sheet and a simple calculator is allowed; a
graphic/algebraical/financial calculator is not allowed.
Problem 1 ( 14 points = 3 + 2 +4 + 5)
1− x
a. Find the domain and the range of the function: f ( x) =
1+ x
x2 − 4
b. Find lim .
x →2 x2 + x − 6
c. Give the coordinates of the points on the curve =y x 1 − x 2 in which the tangent line is horizontal.
d. Given is the function f ( x) = ( x 2 − 2 x − 1) e − x . Find the coordinates of the inflection point(s).
Problem 2 ( 19 points = 4 + 5 + 4 + 6 )
a. Given is the function f ( x, =

y) (x 2
+ y 2 ) e − xy . Give the linear approximation of f (x , y ) if (x, y) is close to (0, 2).
b. Given is the function z ( x, y ) = 1 + x 2 + y 2 .

Find the differential dz and approximate with the aid of the differential the change in z if, outgoing from point
(x , y, z )  (2, 2, 3) , x increases with 0.01 and y decreases with 0.02.
dy
c. Given is F ( x, y ) = − 1 . Find a formula for y  
x 3 + y 2 − 3 xy = and an equation for the tangent to the graph
dx
of F ( x, y ) = − 1 in the point (x, y) = (1, 2).
( x, y ) x 2 e − y + y 2 . Find the stationary point(s) of f and determine the character of the

d. Given is the function f =
2
stationary point(s) (maximum, minimum, saddle point).
Problem 3 ( 12 points = 6 + 6)
dw
ln ( xy + 2 ) , x =−
a. Given is w = t 2 3 and y =
t 3 . Find with the chain rule and approximate with the aid of the
dt
derivative the change in w if t increases from 2 to 2.02.
b. The differentiable function f ( x, y ) is homogeneous of degree 3.

For x = 3 and y = 4 holds: f (3, 4) = 16 and f x′ (3, 4) = 10 . Compute f y′ (3, 4) .
Problem 4 ( 19 points = 4 + 4 + 3 + 8 )
∫ 5x ( 2 x − 1) dx .
9
2 3
a. Find
( tx − 2)
3 2
b. Find ∫ t
dt .
In a market model is given: Demand function: = p f (q= ) 40 ⋅ e − 0.1q + 0.25 with q ≥ 0

Supply function: p = g (q) =4 + 12 2q + 4
p is the price of one unit (in €) and q is the number of units.
c. Show that the demand function is strictly decreasing, the supply function is strictly increasing and for q * = 2.5
there is a market equilibrium.
d. Calculate Consumer Surplus and Producer Surplus under market equilibrium.
Problem 5 ( 18 points = 2 + 4 + 4 + 4 + 4)
p2 p1
The demand functions of two consumer goods are given by: q=
1 40 ⋅ and q=
2 75 ⋅
p1 p2
a. Are the two goods complementary goods or substitutes? Explain.
b. Give with the aid of the marginal demands an approximation of the change in q1 if p1 decreases from 100 to 98
and p2 decreases from 25 to 23.
c. p1 decreases from 100 to 98. Approximate the change in p2 , outgoing from p2 = 25, if the demand for good 1
( q1 ) stays approximately the same.
d. Give with the aid of the partial elasticity’s an approximation of the percentage change in q2 if p1 increases
with 2% and p2 increases with 5%, outgoing from p1 = 100 and p2 = 25.
e. p2 increases with 5%. Approximate the percentage change in p1 , outgoing from p1 = 100 and p2 = 25, if the
demand for good 2 ( q2 ) stays approximately the same.
Problem 6 ( 18 points = 4 + 10 + 4)
Given is the production function: q( L, K ) =⋅

5 5 L ⋅ K c . K is the amount of capital and L the amount of labor.
a. For which value(s) of c is this production function homogeneous of degree 2?
Now is given the production function: q( L, K ) =⋅

5 5 L ⋅ K 4 . K is the amount of capital and L the amount of
labor.
b. Price of capital is 2 and price of labor is 1.

Find, with the method of Lagrange, which values of K and L maximize production, if there is a budget of 500.
Give this maximum production and show that it is indeed a maximum.
c. Approximate with the Lagrange multiplier the new maximum production if there is a budget of 505.

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University of Amsterdam Final test

Faculty of Economics and Business Mathematics

- You must give solutions completely in detail, not just answers.

a. Given is the function f ( x, =

b. Given is the function z ( x, y ) = 1 + x 2 + y 2 .

( x, y ) x 2 e − y + y 2 . Find the stationary point(s) of f and determine the character of the

stationary point(s) (maximum, minimum, saddle point).

b. The differentiable function f ( x, y ) is homogeneous of degree 3.

In a market model is given: Demand function: = p f (q= ) 40 ⋅ e − 0.1q + 0.25 with q ≥ 0

Given is the production function: q( L, K ) =⋅

a. For which value(s) of c is this production function homogeneous of degree 2?

Now is given the production function: q( L, K ) =⋅

b. Price of capital is 2 and price of labor is 1.

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