SPRING 2012, BRAC UNIVERSITY, ESS ECO 205: Quiz 3 Solutions

1. Integrate the following: 12x2 x3 + 2 Answer: Assume that u = x3 + 2, and see that 12x2 x3 + 2
4 du dx 4

dx

= 3x2 . So, the integral can be written as: 3x2 x3 + 2 u4 du dx dx

4

dx = 4 =4 =4 =

dx

u4 du

4u4+1 +c 4+1 4(x3 + 2)5 +c = 5

2. Consider the following dierence equation: 5yt+1 + 2yt 140 = 0 (a) Obtain the general solution (when y0 is unknown). (b) Does yt converge to a steady state? Is convergence oscillatory or monotonic? Answer: (a) Re-arrange to obtain: 2 140 yt+1 = yt + = 0.4yt + 28 5 5 where, comparing with the general linear, autonomous, rst order dierence equation reveals that a = 0.4 and b = 28. Therefore, the general solution (when y0 is unknown) is: yt = (0.4)t C + 28 1 (0.4)t = (0.4)t C + 20 1 (0.4)t 1 (0.4)

(b) For our dierence equation, |a| < 1, so there will be convergence to the steady state. And, also a = 0.4 < 0, so, convergence will be oscillatory. 1

3. Integrate the following: 3x2 + 2 dx 4x3 + 8x Answer: Assume that u = 4x3 + 8x, and see that
du 4 du dx

= 12x2 + 8 = 4 3x2 + 2 ; which means

= 3x2 + 2 dx. So, the integral can be written as: 3x2 + 2 dx = 4x3 + 8x 1 du u 4 1 1 = du 4 u 1 = ln(u) + c 4 1 = ln 4x3 + 8x + c 4

4. Consider the following dierence equation: 2yt+1 4yt + 20 = 0 (a) Obtain the general solution (when y0 is unknown). (b) Find any steady state that exists. (c) Does yt converge to the steady state found above? Answer: (a) Re-arrange to obtain: yt+1 = 2yt 10 where, comparing with the general linear, autonomous, rst order dierence equation reveals that a = 2 and b = 10. Therefore, the general solution (when y0 is unknown) is: yt = (2)t C + (10) 1 (2)t = 2t C + 10 1 2t 1 (2)

(b) Steady state exists when yt+1 = yt = y. Therefore, from the dierence equation: y = 2y 10 y = 10 (c) Here, |a| > 1, so yt will not converge to the above steady state; or, yt will diverge from the steady state. And, also, a = 2 > 0, so, this divergence will be monotonic. 2

5. Integrate the following: x4 2x5 5 Answer: Assume that u = 2x5 5, and see that integral can be written as: x4 2x5 5
4 du dx 4

dx = 10x4 ; which means dx =

du . 10x4

So, the

dx = = 1 4

x4 u4

du 10x4

u4 du

6. Consider the following dierence equation: yt+1 + 2yt + 57 = 0 (a) Obtain the general solution (when y0 is unknown). (b) Find any steady state that exists. (c) Does yt converge to the steady state found above? Answer: (a) Re-arrange to obtain: yt+1 = 2yt 57 where, comparing with the general linear, autonomous, rst order dierence equation reveals that a = 2 and b = 57. Therefore, the general solution (when y0 is unknown) is: yt = (2)t C + (57) 1 (2)t = (2)t C 19 1 (2)t 1 (2)

(b) Steady state exists when yt+1 = yt = y. Therefore, from the dierence equation: y = 2y 57 y= 57 = 19 3

(c) Here, |a| > 1, so yt will not converge to the above steady state; or, yt will diverge from the steady state. And, also, a = 2 < 0, so, this divergence will be oscillatory.