MATHEMATICS FOR ECONOMICS

REVIEW CONTENT

Upon successful completion of the course, the student will demonstrate the ability to:

1. Compute limits and one-sided limits

2. Compute the derivative of a given function (in explicit or implicit form) and solve problems related
to the slope of the tangent line, the rate of change, relative and percentage rates of change
3. Use the derivative to study marginal analysis in economics
4. Use implicit differentiation to solve some applied problems involving related rate of change
5. Use the first derivative to find the intervals of increase and decrease and relative extrema of a given
function
6. Use the second derivative to find the intervals of concavity and relative extrema of a given function
7. Find the absolute extrema of a continuous function on a closed interval
8. Understand two general principles of marginal analysis
9. Calculate the price elasticity of demand
10. Compute indefinite integrals
11. Solve separable differential equations and some initial value problems
12. Use the fundamental theorem of calculus to compute definite integrals
13. Find the Gini index for a given Lorenz curve and compare the relative equity of income distribution
for two professions
14. Compute consumers’ surplus and producers’ surplus
15. Evaluate a given improper integral or show it diverges
16. Compute the first-order and the second-order partial derivatives and use them to study marginal
analysis problems in economics
17. Locate and classify relative extrema for functions of two variables
18. Solve applied problems involving optimization of functions of two variables
19. Use the method of Lagrange multipliers for locating points on a graph where constrained
optimization can occur and for solving applied problems (including utility and allocation of
resources).

Prepare well for the final exam and Good luck!

 REVIEW EXERCISES
1. Determine whether the function 𝑓 (𝑥) is continuous at 𝑥 = 1:
𝐴𝑥 + 1 if 𝑥 ≤ 1
2
𝑓 (𝑥) = {𝑥 + 2𝑥 − 3
if 𝑥 > 1
𝑥−1
Giải: The function 𝑓 (𝑥) is continuous at 𝑥 = 1

2. Find the equation of the tangent line to the curve 𝑥𝑦 2 − 𝑥 2 𝑦 = 6 at the point (2, −1).
 3. A retailer can obtain digital cameras from the manufacturer at a cost of $150 apiece. The retailer
has been selling the cameras at the price of 340 apiece, and at this price, consumers have been
buying 40 cameras a month. The retailer is planning to lower the price to stimulate sales and
estimates that for each $5 reduction in the price, 10 more cameras will be sold each month.
a. Express the retailer’s monthly profit from the sale of cameras as a function of selling price.
b. Estimate the optimal selling price.

Giải a/ The retailer’s monthly profit from the sale of cameras as a function of selling price
 4. A manufacturing firm has received an order to make 400,000 souvenir silver medals
commemorating the anniversary of the landing of Apollo 11 on the moon. The firm owns several
machines, each of which can produce 200 medals per hour. The cost of setting up the machines to
produce the medals is $80 per machine, and the total operating cost is $5.76 per hour.
a. Express the cost of producing the 400,000 medals as a function of the number of machines
used.
b. Estimate the number of machines the firm should use to minimize cost.

Giải

a. Set x is the number of machines used.

=> The cost of producing the 400,000 medals is:

 The firm should use 12 machines to minimize cost

 𝑑𝑦
5. Find by implicit differentiation
𝑑𝑥
a. (2𝑥 + 3𝑦)5 = 𝑥 + 1
b. (1 − 2𝑥𝑦 3 )5 = 𝑥 + 4𝑦

6. When the price of a certain commodity is p dollars per unit, consumers demand x hundred units of
the commodity, where 75𝑥 2 + 17𝑝2 = 5,300.
a. How fast is the demand x changing with respect to time when the price is $7 and decreasing at
𝑑𝑝
the rate of 75 cents per month (that is = −0.75)?
𝑑𝑡
b. Calculate price elasticity of demand when the price is p =7?
7. It is projected that t months from now, the average price per unit for goods in a certain sector of
the economy will be P dollars, where 𝑃(𝑡 ) = −𝑡 3 + 7𝑡 2 + 200𝑡 + 300.
a. At what rate will the price per unit be increasing with respect to time 5 months from now?
b. At what rate will the rate of price increase be changing with respect to time 5 months from
now?
c. Use calculus to estimate the change in the rate of price increasing during the first half of the six
month.
d. Compute the actual change in the rate of price increasing during the first half of the six months.
8. A manufacturer can produce sunglasses at a cost of $5 apiece and estimate that if they are sold for
x dollars apiece, consumer will buy 100(20 − 𝑥) sunglasses a day. At what price should the
manufacturer sell the sunglasses to maximize profit?

The manufacturer sell the sunglasses

9. Bernardo is a real estate developer. He estimates that if 60 luxury houses are built in a certain area,
the average profit will be $47,500 per house. The average profit will decrease by $500 per house
for each additional house built in the area. How many houses should Bernardo build to maximize
the total profit?
Giải: Set x is the number of additional house should Bernardo build to maximize the total profit
 Bernardo should build 77 or 78 houses to maximize the total profit

10. Find the absolute maximum and the absolute minimum values (if any) of the function 𝑓(𝑥) = 3𝑥 4 −
8𝑥 3 + 7 on the interval 0 ≤ 𝑥 ≤ 4.

11. A manufacturer of machinery parts determines that q units of a particular piece will be sold when
the price is 𝑝 = 110 − 𝑞 dollars per unit. The total cost of producing those q units is C(q) dollars,
where 𝐶 (𝑞) = 𝑞3 − 25𝑞2 + 2𝑞 + 3,000.
a. Use marginal cost to estimate the cost of producing the 31st unit. What is the actual cost of
producing the 31st unit?
b. How much profit is derived from the sale of the q units at p dollars per unit?
c. For what value of q is profit maximized?
d. Find the consumers’ surplus for the level of production 𝑞0 that corresponds to maximum profit.
Profit maximized when q = 18 units
12. A manufacturer produces a particular commodity and he estimates that q units of the commodity
will be demanded at a price of 𝑝 = 4(36 − 𝑞2 ) dollars per unit, while q units will be supplied by
producers when the price is 𝑝 = 47 + 3𝑞2 dollars per unit.
a. Find the equilibrium price 𝑝𝑒 (where supply equals demand).
b. Find the consumers’ surplus and the producers’ surplus at equilibrium.
13. A study suggests that the distribution of incomes for social workers and physical therapists may be
represented by Lorenz curves 𝐿1 (𝑥) = 𝑥 1.6 and 𝐿2 (𝑥) = 0.65𝑥 2 + 0.35𝑥, respectively. For which
profession is the distribution of income more equitable?
 Because G1 > G2 => the distribution of income for social workers more equitable than physical
therapists

14. Solve the following initial value problems:

𝑑𝑦 𝑒𝑦
a. = where 𝑦 = 0 when 𝑥 = 1
𝑑𝑥 𝑥𝑦
𝑑𝑦 𝑥𝑦
b. = where 𝑦 = 1 when 𝑥 = 1
𝑑𝑥 3+𝑥
 𝑑𝑦 𝑥𝑦
b/ = where 𝑦 = 1 when 𝑥 = 1
𝑑𝑥 3+𝑥

15. At a certain factory, the marginal cost is 𝑀𝐶 = 6(𝑞 − 5)2 dollars per unit when the production is
q units. By how much will the total manufacturing cost increase if the level of production is raised
from 10 to 13 units.
16. An investment produces a continuous income stream at the rate of 𝑓 (𝑡 ) = 10𝑒 1−0.05𝑡 thousand
dollars per year at time 𝑡. The prevailing interest rate is 5% per year compounded continuously.
a. What is the future value of the investment over a term of 5 years (0 ≤ 𝑡 ≤ 5).
b. What is the present value of the investment over the time period (0 ≤ 𝑡 ≤ 3).

17. The following table gives the values of a function 𝑓. Use the table and the Simpson’s rule with eight
4
equal subintervals to estimate ∫0 𝑓(𝑥) 𝑑𝑥.
𝑥 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
𝑓(𝑥) 2.5 2.6 3.2 3.4 3.8 4.0 4.1 3.8 3.5
18. Either evaluate the following improper integral or show that it diverges.
1
a. ∫−∞ 𝑥𝑒 𝑥+1 𝑑𝑥
+∞ 1
b. ∫0 𝑑𝑡
𝑡(ln 𝑡)2
0 1
c. ∫−∞ (𝑒 2𝑥 + (𝑥−1)2) 𝑑𝑥
 +∞
1
b/ ∫ 𝑑𝑡
0 𝑡(ln 𝑡 )2

0
1
c/ ∫ (𝑒 2𝑥 + ) 𝑑𝑥
−∞ (𝑥 − 1) 2
 19. Find the partial derivatives of the following function:
a. 𝑓 (𝑥, 𝑦) = 𝑥𝑙𝑛(𝑥 2 − 𝑦) + 𝑦𝑙𝑛(𝑦 − 𝑥)
𝑥𝑦
b. 𝑓 (𝑥, 𝑦) = ln
𝑥+3𝑦
c. 𝑓 (𝑥, 𝑦) = 𝑥𝑦𝑒 𝑥𝑦
𝑥 2 −𝑦 2
d. 𝑓 (𝑥, 𝑦) =
2𝑥+𝑦

𝑐/𝑓 (𝑥, 𝑦) = 𝑥𝑦𝑒 𝑥𝑦

𝑥2 − 𝑦2
d/𝑓 (𝑥, 𝑦) =
2𝑥 + 𝑦
20. Find the second order partial derivatives of the following function:
a. 𝑓 (𝑥, 𝑦) = (5𝑥 2 − 𝑦)3
b. 𝑓 (𝑥, 𝑦) = 𝑥 2 + 𝑦 3 − 2𝑥𝑦 2

b/𝑓 (𝑥, 𝑦) = 𝑥 2 + 𝑦 3 − 2𝑥𝑦 2

21. A company produce x units of commodity A and y units of commodity B. All the units can be sold
for 𝑝 = 100 − 𝑥 dollars per unit of A and 𝑞 = 100 − 𝑦 dollars per unit of B. The cost (in dollars) of
producing these units is given by the joint-cost function 𝐶 (𝑥, 𝑦) = 𝑥 2 + 𝑥𝑦 + 𝑦 2 . What should x
and y be to maximize profit?
22. The telephone company is planning to introduce two new types of executive communications
systems that it hopes to sell to its largest commercial customers. It is estimated that if the first type
of system is priced at x hundred dollars per system and the second type of system is priced at y
hundred dollars per system, approximately 40 − 8𝑥 + 5𝑦 consumers will buy the first type and
50 + 9𝑥 − 7𝑦 consumers will buy the second type. If the cost of manufacturing the first type is
$1,000 per system and the cost of manufacturing the second type is $3,000 per system, how should
the telephone company price the systems to generate the largest possible profit?
23. Find all critical points of the given function and classify each as a relative maximum, a relative
minimum, or a saddle point.
a) 𝑓 (𝑥, 𝑦) = (𝑥 + 𝑦)(2𝑥 + 𝑦 − 6)
b) 𝑓 (𝑥, 𝑦) = (𝑥 + 𝑦 + 3)2 − (𝑥 + 2𝑦 − 5)2
 b/𝑓 (𝑥, 𝑦) = (𝑥 + 𝑦 + 3)2 − (𝑥 + 2𝑦 − 5)2

24. A consumer has $600 to spend on two commodities, the first of which costs $3 per unit and the
second of which costs $5 per unit. Suppose that the utility derived by the consumer from x units of
the first commodity and y units of the second commodity is given by 𝑈(𝑥, 𝑦) = 2𝑥 0.9 𝑦 0.6 . How
many units of each commodity should the consumer buy to maximize utility?
25. A manufacturer has $2,100 to spend on the production of a certain product and determines that if
x units of capital and y units of labor are allocated to production, then P units will be produced,
where 𝑃(𝑥, 𝑦) = 10𝑥 0.8 𝑦 0.6 . Suppose each unit of labor costs $30 and each unit of capital costs
$10. How many units of labor and capital should be allocated to maximize production?
26. Use the method of Lagrange multipliers to find the maximum and minimum values of the given
function 𝑓 (𝑥, 𝑦) subject to the indicated constraint.
a) 𝑓 (𝑥, 𝑦) = 𝑥 + 2𝑦; 4𝑥 2 + 𝑦 2 = 68
b) 𝑓 (𝑥, 𝑦) = 𝑥 2 + 2𝑦 2 + 2𝑥 + 3; 𝑥 2 + 𝑦 2 = 4.
Suppose the manager is allotted an extra 1 thousand dollars for development and promotion => The
change in the maximum sales level = Lamda = 259,8