Exam May 2013, Answers Exam May 2013, Answers

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Exam May 2013, answers
Principles of accounting (University of London)
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Examiners’ commentaries 2013

MT105a Mathematics 1
Important note
This commentary reflects the examination and assessment arrangements for this course in the
academic year 2012–13. The format and structure of the examination may change in future years,
and any such changes will be publicised on the virtual learning environment (VLE).
Change from next year: no graph paper

There is one minor change to take effect next year. From the 2014 examination, candidates will
not be issued with graph paper. Any sketching of graphs should be done in the answer book.
Graph paper is not needed. Indeed, as we have mentioned often in Examiners’ commentaries,
the plotting of points in order to graph a function is not the correct approach. A sketch of
the graph of a function should indicate its shape, its position with respect to the axes, and its
intercepts on those axes: it need not be drawn to scale. Graph paper is not necessary for this.
Information about the subject guide
Unless otherwise stated, all cross-references will be to the latest version of the subject guide (2011).
You should always attempt to use the most recent edition of any Essential reading textbook, even if
the commentary and/or online reading list and/or subject guide refers to an earlier edition. If
different editions of Essential reading are listed, please check the VLE for reading supplements – if
none are available, please use the contents list and index of the new edition to find the relevant
section.
General remarks
Learning outcomes
By the end of this half course and having completed the Essential reading and activities you should
be able to demonstrate to the Examiners that you should have:
• used the concepts, terminology, methods and conventions covered in the half course to solve
mathematical problems in this subject
• the ability to solve unseen mathematical problems involving understanding of these concepts
and application of these methods
• seen how mathematical techniques can be used to solve problems in economics and related
subjects.

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Showing your working
We start by emphasising that you should always include your working. This means two things.
First, you should not simply write down the answer in the examination script, but you should
explain the method by which it is obtained. Secondly, you should include rough working (even if it is
messy!). The Examiners want you to get the right answers, of course, but it is more important that
you prove you know what you are doing: that is what is really being examined. We also stress that
if you have not completely solved a problem, you may still be awarded marks for a partial,
incomplete, or slightly wrong, solution; but, if you have written down a wrong answer and nothing
else, no marks can be awarded. So it is certainly in your interests to include all your workings.
Covering the syllabus and choosing questions
You should ensure that you have covered the syllabus in order to perform well in the examination: it
is bad practice to concentrate only on a small range of major topics in the expectation that there
will be lots of marks obtainable for questions on these topics. There are no formal options in this
course: you should study the full extent of the topics described in the syllabus and subject guide. In
particular, since the whole syllabus is examinable, any topic could appear in the examination
questions.
Expectations of the examination paper
Every examination paper is different. You should not assume that your examination will be almost
identical to the previous year’s: for instance, just because there was a question, or a part of a
question, on a certain topic last year, you should not assume there will be one on the same topic this
year. Each year, the Examiners want to test that candidates know and understand a number of
mathematical methods and, in setting an examination paper, they try to test whether the candidate
does indeed know the methods, understands them, and is able to use them, and not merely whether
he or she vaguely remembers them. Because of this, every year there are some questions which are
likely to seem unfamiliar, or different, from previous years’ questions. You should expect to be
surprised by some of the questions. Of course, you will only be examined on material in the syllabus,
so all questions can be answered using the material of the course. There will be enough, routine,
familiar content in the examination so that a candidate who has achieved competence in the course
will pass, but, of course, for a high mark, more is expected: you will have to demonstrate an ability
to solve new and unfamiliar problems.
Answer the question
Please do read the questions carefully. You might be asked to use specific methods, even when other
methods could be used. The purpose of the examination is to test that you know certain methods,
so the Examiners might occasionally ask you to use a specific technique. In such circumstances, only
limited partial credit can be given if you do not use the specified technique. It is also worth reading
the question carefully so that you do not do more than is required (because it is unlikely that you
would get extra marks for doing so). For instance, if a question asked you only to find the critical
points of a function, but not their natures, then you should not determine their natures. Be careful
to read all questions carefully because, although they may look like previous examination questions
on first glance, there can be subtle differences.
Calculators
You are reminded that calculators are not permitted in the examination for this course, under any
circumstances. The Examiners know this, and so they set questions that do not require a calculator.

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It is a good idea to prepare for this by attempting not to use your calculator as you study and revise
this course.
Question spotting
Many candidates are disappointed to find that their examination performance is poorer
than they expected. This can be due to a number of different reasons and the Examiners’
commentaries suggest ways of addressing common problems and improving your performance.
We want to draw your attention to one particular failing – ‘question spotting’, that is,
confining your examination preparation to a few question topics which have come up in past
papers for the course. This can have very serious consequences.
We recognise that candidates may not cover all topics in the syllabus in the same depth, but
you need to be aware that Examiners are free to set questions on any aspect of the syllabus.
This means that you need to study enough of the syllabus to enable you to answer the required
number of examination questions.
The syllabus can be found in the ‘Course information sheet’ in the section of the VLE dedicated
to this course. You should read the syllabus very carefully and ensure that you cover sufficient
material in preparation for the examination.
Examiners will vary the topics and questions from year to year and may well set questions that
have not appeared in past papers – every topic on the syllabus is a legitimate examination
target. So although past papers can be helpful in revision, you cannot assume that topics or
specific questions that have come up in past examinations will occur again.
If you rely on a question spotting strategy, it is likely you will find yourself in
difficulties when you sit the examination paper. We strongly advise you not to
adopt this strategy.

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Important note

section.
Comments on specific questions – Zone A
Candidates should answer all EIGHT questions: all SIX questions of Section A (60 marks in total)
and BOTH questions from Section B (20 marks each).
Section A
Answer all six questions from this section (60 marks in total).
Question 1
Let f and g be functions with f (x) = 2x2 + 4x + 2 and g(x) = x2 + 2x − 3.
(a) Show that the graphs of the functions f and g do not intersect.
(b) Sketch the graphs of both functions on the same diagram.
(c) For a constant c, let h be the function with h(x) = x2 + 2x + c. Find the values of
c for which the graphs of f and h intersect.

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Approaching the question
For reading related to this question, see Chapter 2 of the subject guide.
(a) The x-coordinate of a point of intersection would satisfy

2x2 + 4x + 2 = x2 + 2x − 3.
This is equivalent to
x2 + 2x + 5 = 0,
and this has no solution because the discriminant (‘b2 − 4ac’ in the standard notation),
22 − 4(1)(5), is negative.
(b) The sketch should be as follows (with f being the upper of the two curves):
A fully correct solution should indicate

• intercept of f on x-axis, i.e., x = −1, obtained either by quadratic formula or by
factorisation.
• intercepts of g on x-axis, i.e., x = −3 and x = 1, obtained either by quadratic formula or
by factorisation.
• the U -shape of two non-intersecting quadratic curves.
• their y-intercepts (y = 2 for f and y = −3 for g). (These are not indicated in the above
diagram, for typesetting reasons, but you should mark them on your sketch.)
Note: there is absolutely no need to use graph paper for sketching curves. A sketch is
supposed to indicate the shape and position of curves: it is not meant to be a ‘plot’ of
points on the curve.
(c) There will be an intersection if and only if 2x2 + 4x + 2 = x2 + 2x + c has a solution.
Now,
2x2 + 4x + 2 = x2 + 2x + c ⇐⇒ x2 + 2x + (2 − c) = 0,
and this has a solution if and only if
22 ≥ 4(2 − c).
So we need 4c ≥ 4. That is, c ≥ 1.

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Question 2
Solve the following system of linear equations, using a matrix method:
x+y+z = 2,
2y + z = 0,
−x + y − z = −4.
The recommended method for solving linear equations can be found in Chapter 6 of the subject
guide. It is known by several names: the row operation method, the Gauss-Jordan method, the
row-reduction method, and so on. Many candidates like to use a different method, not covered in
the subject guide, especially ‘Cramer’s rule’. It is acceptable to do so in this question, since it
only requires the use of a matrix method. (But, it has to be a matrix method, as the question
makes explicit: manipulation of the equations will not suffice.) However, our view is that the row
operations method is easier and less prone to error, and it is the method that we intend
candidates to learn. It is possible that in future years we might insist explicitly that a
row-operations method be used.
The standard matrix method approach is now to reduce the augmented matrix to reduced form.
The augmented matrix is  
1 1 1 2
(A|b) =  0 2 1 0 .
−1 1 −1 −4
A valid reduction to row-echelon form is as follows:

   
1 1 1 2 1 1 1 2
R3 +R1
(A|b) =  0 2 1 0 −→ 0 2 1 0
−1 1 −1 −4 0 2 0 −2
 
1
R3
1 1 1 2
2
−→ 0 2 1 0
0 1 0 −1
 
1 1 1 2
R3 ⇋R2
−→ 0 1 0 −1
0 2 1 0
 
1 1 1 2
R3 −2R2
−→ 0 1 0 −1 .
0 0 1 2
We can stop here, or continue to row-reduced echelon form (RREF):

   
1 1 0 0 1 0 0 1
R1 −R3 R1 −R2
−→ 0 1 0 −1 −→ 0 1 0 −1 .
0 0 1 2 0 0 1 2
(Note that R3 ⇋ R2 means interchange the second and third rows.)
So, from the row-echelon form, we have
z = 2, y = −1 and x = 2 − (−1) − 2 = 1.
This is probably a good point at which to make some general comments about how questions are
marked. Clearly, in a question like this, it is easy to get the wrong answer. (Though it should be
noted that in this particular question, you can always substitute the values that you have found

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into the original equations, and this will show whether these are correct or not. So you can tell if
you have the wrong answer and, if you have time, you can then re-work the calculation.)
Examiners understand that arithmetical errors can be made, especially in the stressful
circumstances of an examination. Quite probably, the Examiners themselves would make some
mistakes if they sat the paper. So, although there are marks for correct calculation, there are
also marks for using the right method (even if you make a mistake). So, here, for instance, the
Examiners will award marks if you can indicate that you know how to start to solve the
equations (by writing down an augmented matrix); that you know what row operations are; that
you know what it is you want to achieve with row operations (the reduced matrix, that is); and
that you then know how to work from that reduced matrix to determine the required solutions.
There are marks for all these things.
Be sure to understand that only certain types of operations qualify as valid row operations. In
particular, a number of candidates make the mistake of thinking that subtracting a fixed
constant from each entry of a row is valid. It is not. (And, if you don’t know what we mean by
that, then you’re probably not doing it, which is good!)
Question 3
Find the critical (or stationary) points of the function f (x) = x6 e−x . Determine the
nature of each critical point.
See Chapter 3 of the subject guide for related reading. We have
f ′ (x) = 6x5 e−x − x6 e−x = x5 e−x (6 − x).
For a critical point, f ′ (x) = 0. Now, f ′ (x) = 0 if and only if x = 0 or 6.
We can determine the nature of the critical point by examining the behaviour of the derivative
around the critical point.
At 0, f ′ (x) changes sign from − to +, so this is a minimum.
At 6, f ′ (x) changes sign from + to −, so this is a maximum.
You might be tempted instead to use the second-derivative test (which, for many problems, is
fairly straightforward, though is less so here). We have
f ′′ = 5x4 e−x (6 − x) − x5 e−x (6 − x) − x5 e−x .
(This equals x4 e−x (x2 − 12x + 30), but there is no need to simplify, and indeed no real point.)
We have f ′′ (6) < 0 so this is a maximum.
However, we have f ′′ (0) = 0 so the test fails. It is not correct to infer from the fact that
f ′′ (0) = 0 that 0 is an inflexion. So we must use the sign of the derivative (the method above)
instead. At 0, f ′ (x) changes sign from − to +, so this is a minimum.
Alternatively, it could be observed that f (x) > 0 = f (0) if x < 0 and f (x) > 0 = f (0) if x > 0,
which is enough to show that the point is a minimum.

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Question 4
Determine the following integrals:

Z
x3 ln x dx,
√
Z
x2 x + 3 dx,
1
Z
dx.
1 + e2x
Integration is discussed in Chapter 4 of the subject guide. It can be difficult because it is not
always clear which technique will work. The three main techniques are: substitution, parts, and
partial fractions. More than one method might work (as we shall see), and some integrals require
a combination of methods.
First integral
R
Consider the first integral, x3 ln x dx. This can be solved by a straightforward integration by
parts:
x4
Z 4
x 1
Z
x3 ln x dx = ln x − dx
4 4 x
x4 1
= ln x − x4 + c.
4 16
Second integral
R √
The next integral, x2 x + 3 dx, is most easily done by substitution, but can also be done by
parts.
Method A: by substitution u = x + 3
R
Let u = x + 3. The integral becomes (u − 3)2 u1/2 du This is
2 7/2 12 5/2
Z
(u5/2 − 6u3/2 + 9u1/2 ) du = u − u + 6u3/2 + c
7 5
2 12
= (x + 3)7/2 − (x + 3)5/2 + 6(x + 3)3/2 + c.
7 5
√
Method B: by substitution u = x+3
√
Let u = x + 3. We have
du 1 1
= √ = ,
dx 2 x+3 2u
R
so dx = 2u du. The integral then becomes (u2 − 3)2 u(2u) du.
So the integral is
2 7 12 5
Z
2 (u6 − 6u4 + 9u2 ) du = u − u + 6u3 + c
7 5
2 12
= (x + 3)7/2 − (x + 3)5/2 + 6(x + 3)3/2 + c.
7 5

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Method C: by parts
√ 2 4
Z Z
x2 x + 3 dx = x2 (x + 3)3/2 − x(x + 3)3/2 dx.
3 3
And,
2 2
Z Z
x(x + 3)3/2 dx = x(x + 3)5/2 − (x + 3)5/2 dx
5 5
2 22
= x(x + 3)5/2 − (x + 3)7/2 + c.
5 57
So the integral is
2 2 8 16
x (x + 3)3/2 − x(x + 3)5/2 + (x + 3)7/2 + c.
3 15 105
Third integral
1
Z
The third integral, dx, can be done using a substitution, perhaps after rewriting the
1 + e2x
integral.
Method A: by substituting u = 1 + e2x and using partial fractions
Let u = 1 + e2x .
Then du = 2e2x dx = 2(u − 1) dx and the integral is

1 du
Z
.
2 (u − 1)u
Partial fractions means there are A, B such that the integrand takes the form
A B
+ .
u−1 u
We find (by a number of possible methods) that
A = 1/2, B = −1/2
and hence the integral is

1 1 1 1
Z
− du = ln |u − 1| − ln |u| + c
2(u − 1) 2u 2 2
1 1
= ln(e2x ) − ln(1 + e2x ) + c.
2 2
(Of course, the first term can be simplified to x.)
Method B: multiplying numerator and denominator by e−x first
The integral is
e−x
Z
dx.
e−x + ex
Now we use a substitution. Let u = e−x . Then du = −e−x dx and the integral is
u 1 u
Z Z
− du = − du
u + 1/u u 1 + u2
1
= − ln(1 + u2 ) + c
2
1
= − ln(1 + e−2x ) + c.
2

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Method C: by multiplying numerator and denominator by e−2x first
The integral is
e−2x
Z
dx.
e−2x +1
Note now that the numerator is −1/2 times the derivative of the denominator, or perform the
substitution u = e−2x + 1, to deduce that the integral is
1
− ln(e−2x + 1) + c.
2
An explicit substitution argument is as follows. We let u = 1 + e−2x . Then du = −2e−2x dx, so

the integral is
1 du 1
Z
− = − ln |u| + c
2 u 2
1
= − − ln(e−2x + 1) + c.
2
Question 5
The function f (x, y) is given by

y
f (x, y) = xy ln ,
x
∂f ∂f
for x, y > 0. Find the partial derivatives and .
∂x ∂y
Verify that
∂f ∂f
x +y = 2f (x, y).
∂x ∂y
Partial differentiation is discussed in Chapter 5 of the subject guide. We have

∂f
= y ln(y/x) + xy(x/y)(−y/x2 ) = y ln(y/x) − y
∂x
and
∂f
= x ln(y/x) + xy(x/y)(1/x) = x ln(y/x) + x.
∂y
Then,
∂f ∂f
x +y = (xy ln(y/x) − xy) + (yx ln(y/x) + yx)
∂x ∂y
= 2xy ln(y/x) = 2f.
Alternatively, you could start by noting that
f (x, y) = xy (ln y − ln x) .
So
∂f
= y(ln y − ln x) + xy (−1/x)
∂x
and
∂f
= x (ln y − ln x) + xy (1/y) .
∂y
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Question 6
A consumer can buy quantities of two√goods, X and Y . If she buys x units of X and
y units of Y , then her utility is u = y 2 x. Each unit of X and each unit of Y costs 1
dollar. Given that the consumer has a budget of 100 dollars, determine the number
of units of each good she should buy in order to maximize u.
This is a constrained optimisation problem and the appropriate method to solve it is the
Lagrange multiplier method, discussed in Chapter 5 of the subject guide.
The √
problem is to maximise u subject to x + y = 100. The Lagrangean is
L = xy 2 − λ(x + y − 100).
The first-order conditions are

∂L 1
= x−1/2 y 2 − λ = 0
∂x 2
∂L √
= 2 xy − λ = 0
∂y
∂L
= −(x + y − 100) = 0.
∂λ
√
We next eliminate λ. From the first two equations, λ = (1/2)x−1/2 y 2 = 2 xy. On simplification
(elimination of λ), this becomes y = 4x. Then the third equation shows that x = 20, y = 80.
You are not expected to check second order conditions for constrained optimisation problems.
This is not part of the syllabus and there is no credit for doing it.
Section B
Answer both questions from this section (20 marks each).
Question 7
(a) A graduate starts work with an organisation for a salary in year 1 of $S. At
the beginning of each subsequent year, his salary is increased by 5% plus an
additional amount of $500. (So, for instance, if his salary in year 1 was $20000
then his salary in year 2 will be $21500.) Determine an expression, in as simple a
form as possible, for his salary in year N + 1 of his employment.

Chapter 7 of the subject guide gives the required background material.
In year 1, the salary is S.
In year 2, it is (1.05)S + 500.
In year 3, it is
(1.05)((1.05)S + 500) + 500 = (1.05)2 S + (1.05)500 + 500.
In year 4, it is
(1.05)3 S + (1.05)2 500 + (1.05)500 + 500.
In general, the salary in year N + 1 is
(1.05)N S + (1.05)N −1 500 + (1.05)N −2 500 + · · · + 500.
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This simplifies (noting the geometric progression) to
1 − (1.05)N
(1.05)N S + 500 = (1.05)N + 10000((1.05)N − 1)
1 − 1.05
or, equivalently, (10000 + S)(1.05)N − 10000.
(b) The function f is given, for x, y 6= 0, by

4 2x
f (x, y) = − + y.
x y
Show that f has one critical (or stationary) point and determine what type of
critical point this is.

Partial differentiation is discussed in Chapter 5 of the subject guide.
The partial derivatives are
4 2
fx = − −
x2 y
2x
fy = + 1.
y2
We solve fx = fy = 0.
fx = 0 means y = −(1/2)x2 . Then, fy = 0 implies 2x/(x2 /2)2 = −1, so x3 = −8 and
x = −2. Then, y = −x2 /2 = −2. Of course, there are other valid ways of solving these
equations.
So we have one critical point, (−2, −2). The second derivatives are
fxx = 8/x3 , fyy = −4x/y 3 , fxy = 2/y 2 .

2
At (−2, −2) we have fxx = −1, fyy = −1, fxy = 1/2. So fxx < 0 and fxx fyy − fxy > 0, so
this is a local maximum point.
Question 8
(a) If a company
√ uses k units of capital and l units of labour, then its output is
Q = k 1/4 l. Each unit of capital costs the company 20 dollars and each unit of
labour costs the company 10 dollars. Use the method of Lagrange multipliers to
find, in terms of Q, the company’s minimum total expenditure on capital and
labour.

This is a constrained optimisation problem, as discussed in Chapter 5 of the subject guide.
We have to minimise 20k + 10l subject to the constraint k 1/4 l1/2 = Q. The Lagrangean is
L = 20k + 10l − λ(k 1/4 l1/2 − Q). The optimal k and l satisfy the equations
∂L 1
= 20 − λk −3/4 l1/2 = 0,
∂k 4
∂L 1
= 10 − λk 1/4 l−1/2 = 0.
∂l 2
These show, on elimination of λ, that 80k 3/4 l−1/2 = 20k −1/4 l1/2 , so that l = 4k. Then,
given that k 1/4 l1/2 = Q, we have
1/2
k 1/4 l1/2 = k 1/4 (4k) = Q.
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4/3
So 2k 3/4 = Q and so k = (Q/2) . Therefore l = 4k = 4(Q/2)4/3 and the minimum cost is
4/3 4/3 4/3
Q Q Q
20k + 10l = 20 + 40 = 60 .
2 2 2
(b) Show that the only critical point of the function
f (x, y) = x4 − x2 y 2 − y 4
is (0, 0). By considering f (x, 0) and f (0, y), or otherwise, determine the nature of
this critical point.

This question uses the material in Chapter 5 of the subject guide.
4x3 − 2xy 2 = 2x(2x2 − y 2 ) = 0

2 3 2 2
−2x y − 4y = −2y(x + 2y ) = 0.
From the second equation, we have y = 0 or x2 + 2y 2 = 0. (We could, of course, equally well
start with the first equation.) Now, x2 + 2y 2 = 0 implies (x, y) = (0, 0). (And this satisfies
the first equation.) And, if y = 0, the first equation shows x = 0. So the only critical point
is (0, 0).
Note: it is not enough merely to observe that (0, 0) is a critical point because it makes the
derivatives 0: you need to manipulate the equations to show it is the only critical point.
We have f (x, 0) = x4 > 0 if x 6= 0 and f (0, y) = −y 4 < 0 if y 6= 0. Since f (0, 0) = 0, the
point (0, 0) is therefore neither a maximum nor a minimum and is hence a saddle point.
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Important note

section.
Comments on specific questions – Zone B
Candidates should answer all EIGHT questions: all SIX questions of Section A (60 marks in total)
and BOTH questions from Section B (20 marks each).
Section A
Answer all six questions from this section (60 marks in total).
Question 1
Let f and g be functions with f (x) = 2x2 + 4x + 2 and g(x) = x2 + 2x − 3.
(a) Show that the graphs of the functions f and g do not intersect.
(b) Sketch the graphs of both functions on the same diagram.
(c) For a constant c, let h be the function with h(x) = x2 + 2x + c. Find the values of
c for which the graphs of f and h intersect.
14

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For reading related to this question, see Chapter 2 of the subject guide.
(a) The x-coordinate of a point of intersection would satisfy

2x2 + 4x + 2 = x2 + 2x − 3.
This is equivalent to
x2 + 2x + 5 = 0,
and this has no solution because the discriminant (‘b2 − 4ac’ in the standard notation),
22 − 4(1)(5), is negative.
(b) The sketch should be as follows (with f being the upper of the two curves):
A fully correct solution should indicate

• intercept of f on x-axis, i.e., x = −1, obtained either by quadratic formula or by
factorisation.
• intercepts of g on x-axis, i.e., x = −3 and x = 1, obtained either by quadratic formula or
by factorisation.
• the U -shape of two non-intersecting quadratic curves.
• their y-intercepts (y = 2 for f and y = −3 for g). (These are not indicated in the above
diagram, for typesetting reasons, but you should mark them on your sketch.)
Note: there is absolutely no need to use graph paper for sketching curves. A sketch is
supposed to indicate the shape and position of curves: it is not meant to be a ‘plot’ of
points on the curve.
(c) There will be an intersection if and only if 2x2 + 4x + 2 = x2 + 2x + c has a solution.
Now,
2x2 + 4x + 2 = x2 + 2x + c ⇐⇒ x2 + 2x + (2 − c) = 0,
and this has a solution if and only if
22 ≥ 4(2 − c).
So we need 4c ≥ 4. That is, c ≥ 1.
15

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Question 2
Solve the following system of linear equations, using a matrix method:
x−y+z = −3,
−3x + 4y − z = 2,
x − 3y − 2z = 7.
The recommended method for solving linear equations can be found in Chapter 6 of the subject
guide. It is known by several names: the row operation method, the Gauss-Jordan method, the
row-reduction method, and so on. Many candidates like to use a different method, not covered in
the subject guide, especially ‘Cramer’s rule’. It is acceptable to do so in this question, since it
only requires the use of a matrix method. (But, it has to be a matrix method, as the question
makes explicit: manipulation of the equations will not suffice.) However, our view is that the row
operations method is easier and less prone to error, and it is the method that we intend
candidates to learn. It is possible that in future years we might insist explicitly that a
row-operations method be used.
The standard matrix method approach is now to reduce the augmented matrix to reduced form.
The augmented matrix is  
1 −1 1 3
(A|b) = −3 4 −1 2.
1 −3 −2 7
A valid reduction to row-echelon form is as follows:
   
1 −1 1 3 1 −1 1
−3
R2 +3R1
(A|b) = −3 4 −1 2 −→ 0 1 2
−7
R3 −R1
1 −3 −2 7 0 −2 −3
10
 
1 −1 1 −3
R3 +2R2
−→ 0 1 2 −7 .
0 0 1 −4
We can stop here, or continue to row-reduced echelon form (RREF):

   
1 −1 0 1 1 0 0 2
R1 −R3 R1 +R2
−→  0 1 0 1  −→ 0 1 0 1 .
R2 −2R3
0 0 1 −4 0 0 1 −4
From the row-echelon form, we have
z = −4, y = −7 − 2(−4) = 1 and x = −3 − (−4) + 1 = 2.
This is probably a good point at which to make some general comments about how questions are
marked. Clearly, in a question like this, it is easy to get the wrong answer. (Though it should be
noted that in this particular question, you can always substitute the values that you have found
into the original equations, and this will show whether these are correct or not. So you can tell if
you have the wrong answer and, if you have time, you can then re-work the calculation.)
Examiners understand that arithmetical errors can be made, especially in the stressful
circumstances of an examination. Quite probably, the Examiners themselves would make some
mistakes if they sat the paper. So, although there are marks for correct calculation, there are
also marks for using the right method (even if you make a mistake). So, here, for instance, the
Examiners will award marks if you can indicate that you know how to start to solve the
equations (by writing down an augmented matrix); that you know what row operations are; that
you know what it is you want to achieve with row operations (the reduced matrix, that is); and
16

lOMoARcPSD|8917543
that you then know how to work from that reduced matrix to determine the required solutions.
There are marks for all these things.
Be sure to understand that only certain types of operations qualify as valid row operations. In
particular, a number of candidates make the mistake of thinking that subtracting a fixed
constant from each entry of a row is valid. It is not. (And, if you don’t know what we mean by
that, then you’re probably not doing it, which is good!)
Question 3
Find the critical (or stationary) points of the function f (x) = x4 e−x . Determine the
nature of each critical point.
See Chapter 3 of the subject guide for related reading. We have
f ′ (x) = 4x3 e−x − x4 e−x = x3 e−x (4 − x).
For a critical point, f ′ (x) = 0. Now, f ′ (x) = 0 if and only if x = 0 or 4.
We can determine the nature of the critical point by examining the behaviour of the derivative
around the critical point.
At 0, f ′ (x) changes sign from − to +, so this is a minimum.
At 4, f ′ (x) changes sign from + to −, so this is a maximum.
You might be tempted instead to use the second-derivative test (which, for many problems, is
fairly straightforward, though is less so here). We have
f ′′ = 3x2 e−x (4 − x) − x3 e−x (4 − x) − x3 e−x .
(This equals x2 e−x (x2 − 8x + 12), but there is no need to simplify, and indeed no real point.) We
have f ′′ (4) < 0 so this is a maximum.
However, we have f ′′ (0) = 0 so the test fails. It is not correct to infer from the fact that
f ′′ (0) = 0 that 0 is an inflexion. So we must use the sign of the derivative (the method above)
instead. At 0, f ′ (x) changes sign from − to +, so this is a minimum.
Alternatively, it could be observed that f (x) > 0 = f (0) if x < 0 and f (x) > 0 = f (0) if x > 0,
which is enough to show that the point is a minimum.
Question 4
Determine the integrals

1
Z
dx,
x2 − 3x + 2
Z p √
1+ x
√ dx,
x
Z
x3 ln(x2 − 1) dx.
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Integration is discussed in Chapter 4 of the subject guide. It can be difficult because it is not
always clear which technique will work. The three main techniques are: substitution, parts, and
partial fractions. More than one method might work (as we shall see), and some integrals require
a combination of methods.
First integral
1
Z
Consider the first integral, dx. This is a straightforward partial fractions integral:
x2 − 3x + 2
1 1
= .
x2 − 3x + 2 (x − 2)(x − 1)
So, there are constants A, B such that
1 A B
= + .
x2 − 3x + 2 x−2 x−1
We find (by a number of possible methods) that
A = 1, B = −1
and hence the integral is

ln |x − 2| − ln |x − 1| + c.
Second integral
Z p √
1+ x
The next integral, √ dx, is most easily done by substitution, and there are various
x
approaches.
√
Method A: by substitution u = 1 + x
√
let u = 1 + x. Then
1
du = √ dx
2 x
R√
and the integral becomes 2 u du. This is
4 3/2 4 √
u + c = (1 + x)3/2 + c.
3 3
p √
Method B: by substitution u = 1+ x
p √
Let u = 1 + x. Then
1
du = √ p √ dx
4 x 1+ x
R
and the integral becomes 4 u2 du. This is
4 3 4 √
u + c = (1 + x)3/2 + c.
3 3
√
Method C: by substitution u = x
√
Let u = x. Then
1
du = √ dx
2 x
R√
and the integral becomes 2 1 + u du. This is
4 4 √
(1 + u)3/2 + c = (1 + x)3/2 + c.
3 3
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Third integral
R
The third integral, x3 ln(x2 − 1) dx, can be done using a substitution, followed by integration
by parts. (It can also be done directly by integration by parts, but we won’t present that
approach here.)
Method A: substitute u = x2 − 1
Let u = x2 − 1. Then du = 2xdx and the integral is

1
Z
(u + 1) ln u du.
2
Now we can use parts.
u2
Z 2
1 1 1 u 1
Z
(u + 1) ln u du = + u ln u − +u du
2 2 2 2 2 u
u2

1 2 1 u
= u + u ln u − − + c.
4 2 8 2
So the answer is
(x2 − 1)2 x2 − 1

1 2 1 2
(x − 1) + (x − 1) ln(x2 − 1) −
2
− + c.
4 2 8 2
Method B: substitute u = x2
Let u = x2 . Then du = 2xdx and the integral is

1
Z
u ln(u − 1) du.
2
Now we can use parts.
1 1 2 1 u2
Z Z
u ln(u − 1) du = u ln(u − 1) − du.
2 4 4 u−1
Now we substitute v = u − 1 to see that
u2 (v + 1)2
Z 2
v + 2v + 1 1
Z Z Z
du = dv = dv = v + 2 + dv.
u−1 v v v
This is
v2 (u − 1)2
+ 2v + ln |v| + c = + 2(u − 1) + ln |u − 1|.
2 2
So the answer is
1 2 (u − 1)2 1 1
u ln(u − 1) − + (u − 1) + ln |u − 1| + c
4 8 2 4
1 4 (x2 − 1)2 1 1
= x ln(x2 − 1) − + (x2 − 1) + ln |x2 − 1| + c.
4 8 2 4
Question 5
The function f (x, y) is given by

x
f (x, y) = xy ln ,
y
∂f ∂f
for x, y > 0. Find the partial derivatives and .
∂x ∂y
19

lOMoARcPSD|8917543
Verify that
∂f ∂f
x +y = 2f (x, y).
∂x ∂y
Partial differentiation is discussed in Chapter 5 of the subject guide. We have
∂f
= y ln(x/y) + xy(y/x)(1/y) = x ln(x/y) + y
∂x
and
∂f
= x ln(x/y) + xy(y/x)(−x/y 2 ) = x ln(x/y) − x.
∂y
Then,
∂f ∂f
x +y = (xy ln(x/y) + xy) + (yx ln(x/y) − yx)
∂x ∂y
= 2xy ln(y/x) = 2f.
Alternatively, you could start by noting that
f (x, y) = xy (ln x − ln y) .
So
∂f
= y(ln y − ln x) + xy (−1/x)
∂x
and
∂f
= x (ln y − ln x) + xy (1/y) .
∂y
Question 6
A consumer can buy quantities of two goods, X and Y . If she buys x units of X and
y units of Y , then her utility is u = xy 3/2 . Each unit of X costs 1 dollar and each unit
of Y costs 2 dollars. Given that the consumer has a budget of 100 dollars, determine
the number of units of each good she should buy in order to maximize u.
This is a constrained optimisation problem and the appropriate method to solve it is the
Lagrange multiplier method, discussed in Chapter 5 of the subject guide.
The problem is to maximise u subject to x + 2y = 100. The Lagrangean is

L = xy 3/2 − λ(x + 2y − 100).

∂L
= y 3/2 − λ = 0
∂x
∂L 3
= xy 1/2 − 2λ = 0
∂y 2
∂L
= −(x + 2y − 100) = 0.
∂λ
We next eliminate λ. From the first two equations, λ = y 3/2 = 43 xy 1/2 . On simplification
(elimination of λ), this becomes y = (3/4)x. Then the third equation shows that x = 40, y = 30.
20

lOMoARcPSD|8917543
You are not expected to check second order conditions for constrained optimisation problems.
This is not part of the syllabus and there is no credit for doing it.
Section B
Answer both questions from this section (20 marks each).
Question 7
(a) A graduate starts work with an organisation for a salary in year 1 of $S. At
the beginning of each subsequent year, his salary is increased by 5% plus an
additional amount of $500. (So, for instance, if his salary in year 1 was $20000
then his salary in year 2 will be $21500.) Determine an expression, in as simple a
form as possible, for his salary in year N + 1 of his employment.

Chapter 7 of the subject guide gives the required background material.
In year 1, the salary is S.
In year 2, it is (1.05)S + 500.
In year 3, it is
(1.05)((1.05)S + 500) + 500 = (1.05)2 S + (1.05)500 + 500.
In year 4, it is
(1.05)3 S + (1.05)2 500 + (1.05)500 + 500.
In general, the salary in year N + 1 is
(1.05)N S + (1.05)N −1 500 + (1.05)N −2 500 + · · · + 500.
This simplifies (noting the geometric progression) to
1 − (1.05)N
(1.05)N S + 500 = (1.05)N + 10000((1.05)N − 1)
1 − 1.05
or, equivalently, (10000 + S)(1.05)N − 10000.
(b) The function f is given, for x, y 6= 0, by
4 2y
f (x, y) = x + − .
y x
Show that f has one critical (or stationary) point and determine what type of
critical point this is.

Partial differentiation is discussed in Chapter 5 of the subject guide.
The partial derivatives are
2y
fx = 1 +
x2
4 2
fy = − 2 − .
y x
We solve fx = fy = 0.
fy = 0 means x = −(1/2)y 2 . Then, fx = 0 implies 2y/(y 2 /2)2 = −1, so y 3 = −8 and y = −2.
Then, x = −y 2 /2 = −2. Of course, there are other valid ways of solving these equations.
21

lOMoARcPSD|8917543
So we have one critical point, (−2, −2). The second derivatives are
fxx = −4y/x3 , fyy = 8/y 3 , fxy = 2/x2 .
2
At (−2, −2) we have fxx = −1, fyy = −1, fxy = 1/2. So fxx < 0 and fxx fyy − fxy > 0, so
this is a local maximum point.
Question 8
(a) If a company
√ uses k units of capital and l units of labour, then its output is
Q = k 1/3 l. Each unit of capital costs the company 20 dollars and each unit of
labour costs the company 10 dollars. Use the method of Lagrange multipliers to
find, in terms of Q, the company’s minimum total expenditure on capital and
labour.

This is a constrained optimisation problem, as discussed in Chapter 5 of the subject guide.
√
We have to minimise 20k√ + 10l subject to the constraint k 1/3 l = Q. The Lagrangean is
L = 20k + 10l − λ(k 1/3 l − Q). The optimal k and l satisfy the equations
∂L 1
= 20 − λk −2/3 l1/2 = 0,
∂k 3
∂L 1
= 10 − λk 1/3 l−1/2 = 0.
∂l 2
These show, on elimination of λ, that 60k 2/3 l−1/2 = 20k −1/3 l1/2 , so that l = 3k. Then,
given that k 1/3 l1/2 = Q, we have
1/2
k 1/3 l1/2 = k 1/3 (3k) = Q.
So 31/2 k 5/6 = Q and so k = 3−3/5 Q6/5 . Therefore l = 3k = 3 3−3/5 Q6/5 and the minimum
cost is
20k + 10l = 20 3−3/5 Q6/5 + 30 3−3/5 Q6/5 = 50 3−3/5 Q6/5 .
(b) Show that the only critical point of the function

f (x, y) = −x4 − x2 y 2 + y 4
is (0, 0). By considering f (x, 0) and f (0, y), or otherwise, determine the nature of
this critical point.

This question uses the material in Chapter 5 of the subject guide.
−4x3 − 2xy 2 = −2x(2x2 + y 2 ) = 0
2 3 2 2
−2x y + 4y = 2y(2y − x ) = 0.
2 2
From the first equation, we have x = 0 or 2x + y = 0. (We could, of course, equally well
start with the second equation.) Now, 2x2 + 2y 2 = 0 implies (x, y) = (0, 0). (And this
satisfies the second equation.) And, if x = 0, the second equation shows y = 0. So the only
critical point is (0, 0).
Note: it is not enough merely to observe that (0, 0) is a critical point because it makes the
derivatives 0: you need to manipulate the equations to show it is the only critical point.
We have f (x, 0) = −x4 < 0 if x 6= 0 and f (0, y) = y 4 > 0 if y 6= 0. Since f (0, 0) = 0, the
point (0, 0) is therefore neither a maximum nor a minimum and is hence a saddle point.
22

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Exam May 2013, answers

Principles of accounting (University of London)

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Examiners’ commentaries 2013

Examiners’ commentaries 2013

Change from next year: no graph paper

Information about the subject guide

Downloaded by Mingun Jeon (mingunjeon317@gmail.com)

Showing your working

Covering the syllabus and choosing questions

Expectations of the examination paper

Answer the question

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Examiners’ commentaries 2013

Downloaded by Mingun Jeon (mingunjeon317@gmail.com)

Examiners’ commentaries 2013

Change from next year: no graph paper

Information about the subject guide

Comments on specific questions – Zone A

Let f and g be functions with f (x) = 2x2 + 4x + 2 and g(x) = x2 + 2x − 3.

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Examiners’ commentaries 2013

Approaching the question

(a) The x-coordinate of a point of intersection would satisfy

A fully correct solution should indicate

So we need 4c ≥ 4. That is, c ≥ 1.

Downloaded by Mingun Jeon (mingunjeon317@gmail.com)

Solve the following system of linear equations, using a matrix method:

Approaching the question

A valid reduction to row-echelon form is as follows:

We can stop here, or continue to row-reduced echelon form (RREF):

(Note that R3 ⇋ R2 means interchange the second and third rows.)

So, from the row-echelon form, we have

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Examiners’ commentaries 2013

Approaching the question

See Chapter 3 of the subject guide for related reading. We have

f ′ (x) = 6x5 e−x − x6 e−x = x5 e−x (6 − x).

For a critical point, f ′ (x) = 0. Now, f ′ (x) = 0 if and only if x = 0 or 6.

At 0, f ′ (x) changes sign from − to +, so this is a minimum.

At 6, f ′ (x) changes sign from + to −, so this is a maximum.

f ′′ = 5x4 e−x (6 − x) − x5 e−x (6 − x) − x5 e−x .

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Determine the following integrals:

Approaching the question

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Examiners’ commentaries 2013

Method A: by substituting u = 1 + e2x and using partial fractions

Then du = 2e2x dx = 2(u − 1) dx and the integral is

and hence the integral is

Method B: multiplying numerator and denominator by e−x first

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Method C: by multiplying numerator and denominator by e−2x first

An explicit substitution argument is as follows. We let u = 1 + e−2x . Then du = −2e−2x dx, so

The function f (x, y) is given by

Approaching the question