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Eco (H) Semester-I

Mathematical Methods for Economics-I


Instructions:

Maximum Marks: 75

1.
2.

All Questions are to be attempted:


Use of simple Calculator is permitted.

1.

Answer any two parts:


(a)

Solve the inequalities

(i)
(b)

(i)
(ii)

2
1, x 4
x4

Find the restrictions on a, b and c for which

ax 2 bx c 0 , for all x.

Find the domain of the function

f x
(c)

(ii)

2
3
x

log 10 1 x

x 2

Consider the proposition 2 x 5 13


(i)

Is the condition x 0 necessary, or both necessary and sufficient


for the proposition to be satisfied?

(ii)

Answer (i) if x 0 is replaced by x 4


(3.5,3.5)

2.

Attempt any four of the following:


(a)

Find the limit of the following:


(i)

(ii)

10x 2x 5x 1
lim
x0
x2

x2 5
x 3 x 2 2

lim

x 1 3
(b)

Find the vertical, horizontal and oblique (if any) asymptote of the

(c)

Find the point of discontinuity (if any ) of the following functions:

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x2

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(i)

(d)

x if x is rational

0 if x is irrational

Test for convergence :

(i)
(e)

2x 2 3x 1
f x 2
3x 4x 1
(ii)

f x

the series

2 n 1

(ii)

n 1

sn

the sequence

1
2n

Let f be a continuous function on [0, 1]. Show that if 1 f x 1 for all

x 0,1 , then there exists a c 0,1 such that f c 2 c .


(4,4,4,4)
3.

Attempt any three of the following:


(a)

Prove that if the graph of

y f x

ax b
cx a is symmetric about the line y =

x, it must be true that a bc 0 .


2

(b)
(c)

ex ex
y
2
Sketch a graph of
by examining its first-order and second-

order derivatives.
Prove that:

(i)

(ii)
(d)

E 1x f g

fE 1x f gE 1x g
fg

y
ln xy
If x
find the elasticity of y with respect to x .

Examine the convergence of the following series :

(i)
4.

n 1 n

1
2
n 1 n

(ii)

(5,5,5)

Answer any two parts:


(a)

(i)

Given that an economys income, consumption and population


growth rates are 5%, 0.5% and 1.5% respectively, when income Y
= Rs. 10,000 crores and consumption C = Rs. 8,000 crores, find
the rate of growth of per capita savings, where total savings S = Y

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C and population P = 10,00,000. Per capita savings PCS = total


savings S/total population P.
(ii)

2
Verify that for the curve y px qx r p, q, r ; p 0 , the chord

joining the points for which x = a and x = b is parallel to the


tangent at the point

(b)

1
a b
2
.

A wine dealer inherits a case of fine wine (with zero acquisition cost)
whose value at any given time is given by :

V t e t , with 0
(i)

Show that the value of the case of wine grows over time.

(ii)

Show that even though the rate of growth of the value of wine
is positive, it declines over time.

(iii)

If there are no storage costs, calculate the time t* when wine


should be sold in order to maximize profits (Profits = Value of the
case of wine Costs). Assume a continuous discount rate = 10%
and = 1,000.

(iv)

If the current cost of storing the case of wine until t* is Rs.

rv

10,000, would if be worthwhile to hold the case until t*?


(c)

(i)

2
Suppose demand (q) is given by q p 100 4p 0.5p , p 4 , and

demand is to be approximated by a linear function. If p = 8, what


is the linear approximation that you would use? Sketch a graph of
both q(p) and its linear approximation. Where, on the graph, do
you see the best fit?
(ii)

Examine for concavity/convexity the function:

f x

1 6 1 4
x x 10
30
3
. Also find the point(s) of inflection, if any.
(7.5,7.5)

5.

Attempt any three parts:

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(a)

D a b p t , S C dp where a, b, c, d are positive constants and p is

determined when D S . p is implicitly defined as a function of t unit tax .

dp
dt and sign of

dp
.
dt

(i)

Find

(ii)

Compute the tax revenue T as a function of t . For what


value of t does the quadratic function T reach maximum.

(b)

Find the equations of two lines through the origin that are tangent to
the curve:

(c)

x 2 4x y 2 3 0

A monopolist faces the demand curve q p , q 0 . The cost function is

c q q 2 . What restriction(s) must be placed on for a profit-maximizing


solution to exist? Given the restriction(s) on , what is the profitmaximizing output?

(d)

Suppose that a function f(x) is convex. What restriction on the


parameters a and b will guarantee that g(x) = af(x) + b is also convex
if;
(i)

f is twice continuously differentiable

(ii)

f is continuous but not differentiable everywhere

Explain your answer.


6.

(5,5,5)

Attempt both parts:


(a)

Solve the difference equation :

Yt 3 Yt 1 8 0

(i)

check your answer using t 0 and t 1

(ii)

comment on the time path

and

Y0 16

OR

Q dt 86 0.8 Pt ,

where P is the market price

Q st 10 0.2 Pt 1
(i)

Find the equilibrium price.

(ii)

Solve the difference equation

(iii) Comment on the time path.

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(b)

2
Find the area of the region between the curve y 2x x , 0 x 3 and the

x-axis.
OR
Calculate:
(i)

1/3

Q(L), where Q L 6L and Q 0 0


x2

(ii)

2
d
e u du

dx x

(3.5,3.5)
**********

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