UGBS 202 – BUSINESS MATHEMATICS

TUTORIAL SET 1
(INTRODUCTION TO FUNCTIONS AND BASIC CONCEPTS OF DIFFERENTIATION)
FEBRUARY 2017
Not to be submitted

1. The demand function of a product for a manufacturer is 𝑝 (𝑥) = 𝑎𝑥 + 𝑏. The manufacturer

knows that he can sell 1250 units when the price is GHS5 per unit and he can sell 1500 units at
a price of GHS4 per unit. Find the total, and average revenue functions.

2. Janie had just won a prize money worth GHS 100,000 and would like to invest it for a rainy day.
In order to reduce the level of risk on her investments, she has been advised to diversify her
investments. She has the option of investing in three different assets – Asset 1 which yields an
interest of 10% annum, Asset 2 which yields an interest of 12% per annum and Asset 3 which
yields an interest of 8% per annum. Due to the high risk nature of Assets 1 and 2, Janie is advised
to invest not more than 60% of the total amount of the money in Assets 1 and 2. Janie would
want to ensure that she earns returns that will be at exactly 6% of her investment. Formulate the
mathematical equations or inequalities that will afford the chance Janie to meet her requirements.

3. The price of an airplane ticket for a return trip is $600. The airline company attracts an average
500 daily bookings at this price. It has been observed that there is a linear relationship between
the price of the return trip and the number of bookings. This is such that for every $50 decrease
in price, there is an additional 100 bookings. Form a linear equation that relates the number of
bookings with the price of the ticket.

4. A cotton dealer finds that when coats sell for GHS 4000, monthly sales are 6 coats. When the
price increases to GHS5000, the demand is for 5 coats. Assume that the demand equation is
linear. Find the demand and revenue equations.

5. Mikey W. Smitty, an emerging rapper, is getting ready to cut his first CD, called “Western Rap.”
The cost of recording the CD is $5000 but copies are $5 apiece. If the CDs can be sold for $15
each, how many CDs must be sold to break even?

6. Esi, a doll maker from Takoradi, is interested in the mass marketing and production of a ceramic
doll of her own design called Oman. The initial investment required for plant and equipment is
estimated at GHS25000. Labour and material costs are approximately GHS10 per doll. If the
dolls can be sold for GHS50 each, what volume of demand is necessary for the Oman doll to
break even?

7. David Austin recently purchased a chain of dry cleaners in northern Wisconsin. Although the
business is making a modest profit now, David suspects that if he invests in a new Tutorial press,
 he could recognize a substantial increase in profits. The new press costs $15,400 to purchase and
install and can press 40 shirts an hour (or 320 per day). David estimates that with the new press,
it will cost $0.25 to launder and press each shirt. Customers are charged $1.10 per shirt.
a. How many shirts will David have to press to break even?
b. So far, David’s workload has varied from 50 to 200 shirts a day. How long would it take to
break even on the new press at the low-demand estimate? At the high demand estimate?
c. If David cuts his price to $0.99 a shirt, he expects to be able to stabilize his customer base
at 250 shirts per day. How long would it take to break even at the reduced price of $0.99?
Should David cut his price and buy the new press?

8. The derivative of a constant function is a positive integer

A. True B. False

9. The notation dy/dx of function represents the derivative of a function x with respect to y
A. True B. False

10. The marginal price measures the rate of change of price with respect to the quantity of a demand
function
A. True B. False

11. Suppose a demand function is given by the relation p  500  3q , where q is the quantity and p
is the price. Which of the following is true about the function?
I. Price is inversely related to quantity
II. As demand increases price decreases
III. Price and quantity are equal for any integer
IV. The function that relates quantity and price is a linear function
V. The domain of the function is restricted to positive real numbers

A. I only B. I and III only C. I, II, IV and V only

D. I, II and IV only E. I, IV and V only

12. The demand function is given by the equation p  100  0.5q . What is the quantity demanded
when price is 5?
A. 97.5 B. 197.5 C. 200 D. 102.5 E. None of the above

13. Given that y = 7 − 5𝑥, Determine the slope and the intercept of the line
A. Slope = 5, Intercept = 7 B. Slope = 7, Intercept = -5
C. Slope = -5, intercept = 7 D. Slope = -5, Intercept = 7
E. Slope = 7, intercept = 5
14. A manufacturer determines that m employees will produce a total of q unites per day. the relation
between the number of employees and the quantity is given as: 𝑞 = 5𝑚2 + 2𝑚 + 4 and that the
 demand equation for the product is given as 𝑝 = 𝑞 + 9, what is the expression of the rate of
change of price with respect to quantity
A. dp/dq B. dq/dm C.dp/dq D. dp/dm

15. A manufacturer determines that m employees will produce a total of q unites per day. the relation
between the number of employees and the quantity is given as: 𝑞 = 5𝑚2 + 2𝑚 + 4 and that
demand equation for the product is given as 𝑝 = 𝑞 + 9, determine, what is the expression of the
rate of change of price with respect to the number of employees.
A. dp/dq B. dq/dm C.dp/dq D. dp/dm

16. Apply the rules of differentiation to the following:

a. y  x b. y  4x c. f x   x  x
6 3 4 3

e. y  x  1x  2
y  4x 2  2x  3 x3  x2
d. f. y  2
x 2
i. 3 x 3  12 2 x 5  9 
2 3
g. y  ( x  3) 2 h. y  (2 x  5) 6

17. Use the chain rule to solve the following:

𝑑𝑦
a. If 𝑦 = (𝑢2 + 3𝑢 + 5) and 𝑢 = 𝑥 2 + 3, find 𝑑𝑥
𝑑𝑦
b. If 𝑦 = (3𝑢2 + 5𝑢 + 4)2 and 𝑢 = 𝑥 2 + 3, find 𝑑𝑥 when 𝑥 = 1

18. Find the slope of the curve

a. y  x 2  3x, at the point x=6
b. y  x2 
3

x  1 , at the point x=2
x  x 1
2 3
c. y at the point x=1
2x  6

19. Differentiate with respect to z

zx 2  2 z 2 x  11 / 2
y
a. 2x  6

b. y  2 zx  1

20. Find the derivative of the following special functions:

a. 𝑦 = ln 2𝑥 b. 𝑦 = ln(4𝑥 2 + 5𝑥 + 2) c. 𝑦 = ln(2𝑥 2 + 3)4
4
(2𝑥 2 +3) (2𝑥+1)
d. 𝑦 = ln (𝑥+3)2
e. 𝑦 = 𝑒 𝑥 f. 𝑦 = 𝑒 2𝑥
 3 +5𝑥+8
g. 𝑦 = 𝑒 3𝑥

21. The average cost for a TV company is given as

C  1000q  6.75q 2  10340 Where q is the output quantity. Find the marginal cost and
evaluate the marginal cost when quantity is 2000

22. Given that the cost of producing q radio sets is given as C (q)  q 2  80q  3500 . Find the
marginal cost at q = 100

23. The total revenue from a sale of x units of a product is given by R( x)  12x  2 x 2  16 . Find:
a. Total revenue
b. Marginal revenue
c. Marginal revenue at x = 50
24. The consumption function of an organisation is given as C ( x)  ln3 x 2  2 x 5  . Where x is their
4

income, find the marginal propensity to consume when the current income is 100.

25. A manufacturer determines that m employees will produce a total of q unites per day. the relation
between the number of employees and the quantity is given as:
𝑞 = 5𝑚2 + 2𝑚 + 4.
900
Given that the demand equation for the product is given as 𝑝 = 𝑞+9, determine:
a. The rate of change of price with respect to the quantity
b. The rate of change of price with respect to the number of employees
c. Determine the marginal revenue when there are ten employees.

26. If the demand function is given as 𝑥 = 100 − 3𝑝, find the elasticity of demand when 𝑝 = 1.

27. Given the demand equation 𝑝 = −0.05𝑥 + 830𝑥 − 800, find the elasticity of demand

28. Given that the demand equation is 𝑥 = √100 − 2𝑝. Find the elasticity of demand when p = 18.
Is the demand elastic or inelastic at p = 18?