MT1186

BSc DEGREES AND GRADUATE DIPLOMAS IN ECONOMICS, MANAGEMENT,

FINANCE AND THE SOCIAL SCIENCES, THE DIPLOMA IN ECONOMICS AND
SOCIAL SCIENCES AND THE CERTIFICATE IN EDUCATION IN SOCIAL
SCIENCES

Summer 2022 Online Assessment Instructions

MT1186 Mathematical methods

Tuesday 17 May 2022: 09:00 - 13:00 (BST)

The assessment will be a closed-book take-home online assessment within

a 4-hour window. The expected time/effort to answer all questions is 3 hours.

Candidates should answer all FIVE questions. All questions carry equal marks.

You should complete this paper using pen and paper. Please use BLACK INK
only.

Handwritten work then needs to be scanned, converted to PDF and then

uploaded to the exam platform as ONE individual file. Please ensure that your
candidate number is written clearly at the top of each page included in the scan.
Please do not write your name anywhere on your submission.

Workings should be submitted for all questions requiring calculations. Any

necessary assumptions introduced in answering a question are to be stated.

You may use any calculator for any appropriate calculations, but you may not use
any computer software to obtain solutions. Credit will only be given if all workings
are shown.

You have until 13:00 (BST) on Tuesday 17 May 2022 to submit your answers.
However, you are advised not to leave your submission to the last minute in order to
allow sufficient time to submit your work.

If you think there is any information missing or any error in any question, then
you should indicate this but proceed to answer the question stating any
assumptions you have made.

The assessment has been designed with a duration of 4 hours to provide a more
flexible window in which to complete the assessment. As a closed-book exam, the
expected amount of effort required to complete all questions is no more than 3
hours. Organise your time well. You are assured that in terms of answering all

© University of London 2022

questions, there will be no benefit in you going beyond the expected 3 hours of
effort. Your assessment has been carefully designed to help you show what you
have learned in the hours allocated.

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© University of London 2022

 MT1186

MT1186 Mathematical methods

Candidates should answer all FIVE questions. All questions carry equal marks.

Please find questions on the following page.

© University of London 2022

1. A market’s supply and demand functions are given by

pS (q) = eq and pD (q) = 6e−q + 1

respectively.
(a) Find the equilibrium price and quantity for this market.
The government plans to impose an excise (or per unit) tax of T on this market.
(b) Given that 0 < T < 6, find the equilibrium price for this market in the presence of
this tax.
Show that the equilibrium price is an increasing function of T .
Due to complaints from the suppliers and consumers, the government assures them that
the tax will be small.
(c) Find a linear approximation for the equilibrium price for this market in the presence
of this small tax.
Comment on the reliability of this approximation if T = 1.
(d) Use your answer to part (c) to find the corresponding linear approximation for the
equilibrium quantity.

2. Consider the function

2x2 − 9x − 18
f (x) = .
x2 − x − 2
(a) Sketch the curve y = f (x).
(b) Find the area of the region between the curve y = f (x), the x-axis and the vertical
lines x = 3 and x = 6.

3. (a) For what values of the constants a, b and c does the system of equations

x + 2y + z = a,
x − y + z = −2a,
x + 3y + 2z = b,
3x − y + z = c,

have a solution?
For these values of a, b and c, find the solution(s) in terms of a and b. How many
solutions have you found?
(b) Find the stationary points of the function

f (x, y) = x3 − x2 − x − y 2 + 2y

and determine their nature.

4. A firm can produce a quantity

q(x, y) = ((x + 1)3 + y 3 )1/3 ,

in kg, of its good when it uses xkg of copper and ykg of iron.
If copper and iron cost r and s pounds per kg respectively, use the method of Lagrange
multipliers to find the bundle of copper and iron that will minimise this firm’s costs if it
has to produce Qkg of its good.
[You are not required to justify the use of the method of Lagrange multipliers here.]
Also find this firm’s minimum cost, C(Q), and verify that C 0 (Q) is equal to the value of
the Lagrange multiplier.
In what ratio should this firm decrease the amount of copper and iron in their optimal
bundle if they want to obtain the greatest decrease in their cost?

5. (a) Find the eigenvalues of the matrix

 
11 −4
A=
24 −9

and find an eigenvector corresponding to each eigenvalue.

Hence find an invertible matrix P and a diagonal matrix D such that P −1 AP = D.
(b) Suppose that a system of difference equations can be written in the form

xt = Axt−1 + q

where A is diagonalisable and q is a constant vector.

Show that we can define a vector ut which allows us to rewrite this system of difference
equations as

ut = Dut−1 + P −1 q

for some matrices P and D.

(c) Using parts (a) and (b), find the sequences xt and yt that satisfy the system of difference
equations

xt = 11xt−1 − 4yt−1 + 4
yt = 24xt−1 − 9yt−1 + 12

and the initial conditions x0 = 3 and y0 = 7.

END OF PAPER