3 December 2022

Addis Ababa University

Department of Economics
Econ 907: Assignment I
Due Date: Friday 16 December 2022
This assignment carries 20 points (20% of the total score). If you are submitting hand-
written answers, please write legibly, if not, illegible answers will not be marked. Attempt
all the questions and make your answers to the point. Plagiarism is a serious academic
o¤ence which may result in nulli…cation of your scores.

1). Let the matrix A be given by

0 1
2 1 1
B C
B C
A=B 1 2 1 C
@ A
1 1 2

a). Find the eigenvalues of the matrix A. (2 Points)

b). One of the eigenvalues has multiplicity 2. Find two linearly independent eigenvec-
tors associated with this eigenvalue. (2 Points)

2). Prove the following statements:

a). A sequence is said to be bounded if there is a number B such that jxn j B for
all n. Show that if fxn g1 1
n=1 converges to 0 and if fyn gn=1 is bounded, then the

product sequence converges to 0. (2 Points)

b). A convergent sequence in Rm can have only one accumulation point, and therefore
only one limit. (2 Points)

3). Prove the following statements:

1
 a). Let f1 ; : : : ; fk be concave functions, each de…ned on the same convex subset U of
Rn . Let a1 ; : : : ; ak be positive numbers. Then a1 f1 + +ak fk is a concave function
on U . (2 points)

b). Let f1 ; : : : ; fk be concave functions of one variable. Let g (z) be a monotonic

transformation. Prove that

F (x1 ; : : : ; xk ) = g (f1 (x1 ) + + fk (xk ))

is a quasiconcave function. (2 points)

4). Consider the problem of maximizing

f (x; y; z) = xyz + z

subject to the the constraints

x2 + y 2 + z 6; x 0; y 0; z 0

a). Write out a complete set of …rst order conditions for this problem. (1 Point)

b). Determine whether or not the constraint x2 +y 2 +z 6 is binding at any solution.

(1 Point)

c). Find a solution of the …rst order conditions that includes x = 0. (1 Point)

d). Find three equations in the three unknowns x; y; z that must be satis…ed if x 6= 0
at the solution and …nd the solution to the equation system. (1 Point)

5). Consider the function F (x; y; z) = x2 + 3xy + 2yz + y 2 z2 11.

a). If x = 1 and y = 2, …nd a z which satis…es F (x; y; z) = 0. (1 Point)

b). Does this equation de…ne z as an implicit function of x and y near x = 1 and
y = 2? (1 Point)

c). If so, compute

@z (1; 2) @z (1; 2)
and (2 Points)
@x @y