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ProblemSet2 2026

This document outlines Problem Set 2 for a Mathematical Methods in Economics course, due on March 26, 2026. It includes various problems related to derivatives, profit maximization, average total cost functions, and utility functions. The problems require the application of calculus techniques such as the chain rule, first and second derivatives, and conditions for maxima and minima.

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3 views2 pages

ProblemSet2 2026

This document outlines Problem Set 2 for a Mathematical Methods in Economics course, due on March 26, 2026. It includes various problems related to derivatives, profit maximization, average total cost functions, and utility functions. The problems require the application of calculus techniques such as the chain rule, first and second derivatives, and conditions for maxima and minima.

Uploaded by

gavinconboy1208
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Problem Set 2

Mathematical Methods in Economics


Spring 2026, Prof. Soon Ryoo

 Problem Set 2 is due on Thursday, March 26. Show your work.

1. Use the chain rule to find the first derivative of each of the following functions:

(a) y = (5x − 1)4


(b) y = (3x2 − 7x + 9)3

2. Find the first derivative of each of the following functions:

(a) y = (3x − 7)(4x + 5)


(b) y = (−3x + 1)(4x2 − x + 1)
(c) y = (x2 + 1)(x − 1)(2x + 3)
7x − 1
(d) y =
5x + 12
3x + 1
(e) y = 2
5x + 1
3. A firm wants to find the level of output q to maximize profit. It faces the following inverse demand
function:
p = 65 − 0.5q
The total cost function is given by
T C(q) = 100 + 5q + 2q 2

(a) Write out the firm’s profit π(q) as a function of q.


(b) Use the first order condition to find all stationary points.
(c) Check the second order condition to determine your stationary point(s) is a minimum or a maxi-
mum.
(d) What is the profit maximizing level of output? What is the profit-maximizing level of price?

4. The total cost function of a firm is given by

T C(q) = 162 + q + 2q 2

(a) Write the average total cost function AC(q).


(b) Find the level of output that minimizes the average total cost.
(c) Check the second order condition to verify that your answer to (b) is a minimum.
∂y ∂y
5. Find and for each of the following functions:
∂x ∂z
(a) y = 2x3 − 12x2 z + 5z 2
(b) y = (2x + 3)(z − 2)
(c) y = 10x + 6xz 2 − 9z 3
2x + 3
(d) y =
5z − 3

1
6. Find all the first and the second partial derivatives of the following production function:

q = AK α Lβ , 0 < α < 1, 0 < β < 1, A > 0

Check the sign of each of them and verify that Young’s theorem holds.
7. Consider the following utility function.
3 2
u(A, B) = A 5 B 5

(a) Find the expressions for maginal utilities, M UA and M UB .


(b) Find the expression for the ratio of marginal utilities M UA /M UB .

8. Find all the first and the second partial derivatives of the following function:

y = −2x2 + 2xz + 10x + 50z − 3z 2

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