Mathematics Applied to Economics

2nd Seminar and Homework

Partial Derivatives. Applications to Economics
∂f ∂f
(1) Find fx0 (1, 2) = (1, 2) and fy0 (1, 2) = (1, 2) if f (x, y) = 2x4 + 3x2 y + 4y 3 .
∂x ∂y

∂f ∂f ∂f
(2) Find fx0 (1, 1, 0) = (1, 1, 0), fy0 (1, 1, 0) = (1, 1, 0) and fz0 (1, 1, 0) = (1, 1, 0) if f (x, y, z) =
∂x ∂y ∂z
2x2 y − xy 2 z 3 + 2x4 z − y 2 + 4.

(3) Compute all the first order partial derivatives of the following functions:
(a) f (x, y, z) = 2x2 + 3x4 y + y 2 − 2y 2 z + x2 z 2 + z 3
x3 + y 3
(b) f (x, y, z) =
xy
p
(c) f (x, y) = x2 + y 2

(4) Compute all the first and second order partial derivatives of the following functions:
(a) f (x, y) = y ln x
2 z3
(b) f (x, y, z) = exy

(c) f (x, y) = 3x3 − 3x2 y 2

(d) f (x, y, z) = xey + y 2 ez

(5) Compute the indicated partial derivatives:

∂2f
(a) f (x, y) = exy ; =?
∂x2
p+q ∂2f
(b) f (p, q) = ln ; =?
pq ∂q∂p

(6) The production for a certain country is described by the function Q(L, K) = 4L1/4 K 3/4 .
∂Q ∂Q
(a) Compute Q0L = , Q0K = .
∂L ∂K
(b) What is the marginal productivity of labor (capital) when L = 625 and K = 10000? In this
case should the government encourage capital or labor investment in order to increase the
total output of that country?

(c) Write down the 1st order approximation of function Q around the point (625, 10000)

(d) Use the the previous formula to estimate Q(624, 10002).

(e) Show that the output will be double if both the capital investment and the size of the labor
force are doubled.
(7) The production for a certain country is described by the function Q(L, K) = 324L1/3 K 2/3 .
∂Q ∂Q
(a) Compute Q0L = , Q0K = .
∂L ∂K
(b) What is the marginal productivity of labor (capital) when L = 65 and K = 727? In this
case should the government encourage capital or labor investment in order to increase the
total output of that country?

(c) Write down the 1st order approximation of function Q around the point (625, 1000)

(d) Use the the previous formula to estimate Q(65, 727).

(e) Show that the output will be triple if both the capital investment and the size of the labor
force are tripled.