Scribd
Upload
11 views3 pages

Practice_Problems_2_Solutions

The document contains solutions to practice problems for a Mathematics for Economics and Finance course, focusing on derivatives, elasticity of demand, and function analysis. Key topics include finding the derivative of inverse functions, applying standard derivative rules, determining function behavior at specific points, and maximizing a cubic function. Additionally, it discusses the elasticity of demand in relation to a market's demand equation, showing that it never exceeds 3/2.

Uploaded by

S M0
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
11 views3 pages

Practice_Problems_2_Solutions

The document contains solutions to practice problems for a Mathematics for Economics and Finance course, focusing on derivatives, elasticity of demand, and function analysis. Key topics include finding the derivative of inverse functions, applying standard derivative rules, determining function behavior at specific points, and maximizing a cubic function. Additionally, it discusses the elasticity of demand in relation to a market's demand equation, showing that it never exceeds 3/2.

Uploaded by

S M0
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

EF2452: Mathematics for Economics and Finance Sem A 2024-2025

Practice Problem Set 2 Solutions

Question 1: Find the derivative of the inverse of the following function

f (x) = x3 + 1

If y = x3 + 1, then x = (y − 1)1/3 . In other words, the inverse function g = f −1 is given by

g(y) = (y − 1)1/3

Using the formula, we have


1
g ′ (y) =
f ′ (x)
Now, f ′ (x) = 3x2 and so
1 1 1
g ′ (y) = 2
=  2 = (y − 1)
−2/3
3x 3
3 (y − 1)1/3

Here, we have used the inverse function rule/formula. However, you could have differentiated
g directly.

Question 2: Work out the derivatives of the following functions using the standard rules:

(a) ln (2x2 + 5x + 4)
Applying the chain rule, we get
!
′ 1 d 4x + 5
f (x) = 2
(2x2 + 5x + 4) = 2
2x + 5x + 4 dx 2x + 5x + 4

(b) 3x4 ex
Applying the product rule, we get
 
′ 4 d x x d 4
f (x) = 3 x e +e x = 3(x4 ex + 4x3 ex ) = 3x3 ex (x + 4)
dx dx

x4 +6x2 +9

(c) ln x2 +1

We have
x4 + 6x2 + 9
 
f (x) = ln = ln (x4 + 6x2 + 9) − ln (x2 + 1)
x2 + 1

Page 1 of 3
EF2452: Mathematics for Economics and Finance Sem A 2024-2025

Then ! !
1 d 4 1 d 2
f ′ (x) = 4 2
(x + 6x2 + 9) − 2
(x + 1)
x + 6x + 9 dx x + 1 dx
4x3 + 12x 2x 4x3 + 12x 2x
= 4 2
− 2
= 2 2 2 2
− 2
x + 6x + 9 x + 1 (x ) + (2)(3)x + 3 x +1
4x(x2 + 3) 2x 4x 2x 4x(x2 + 1) − 2x(x2 + 3)
= − = − =
(x2 + 3)2 x2 + 1 x2 + 3 x2 + 1 (x2 + 3)(x2 + 1)
4x3 + 4x − 2x3 − 6x 2x3 − 2x
= =
x4 + x2 + 3x2 + 3 x4 + 4x2 + 3

Question 3: Determine if f (x) = (x − 6)ln x is increasing or decreasing at the following


points

(a) x = 1

(b) x = 20

The derivative of a function gives the rate of change for the function. Here, we have
x−6
f ′ (x) = ln x +
x
(a) f ′ (1) = ln 1 + 1−6
1
= −5 < 0
′
Since, f (1) < 0, the function f (x) is decreasing at x = 1.

(b) f ′ (20) = ln 20 + 20−6


20
= 3.69 > 0
′
Since, f (20) > 0, the function f (x) is increasing at x = 20.

Question 4: Find the maximum value of the function

f (x) = −2x3 + 3x2 + 12x + 9

in the interval [0, ∞).

The first-order condition is:

f ′ (x) = −6x2 + 6x + 12 = 0

=⇒ −6(x2 − x − 2) = 0

Page 2 of 3
EF2452: Mathematics for Economics and Finance Sem A 2024-2025

=⇒ −6(x2 + x − 2x − 2) = −6(x + 1)(x − 2) = 0

=⇒ x = −1 or 2

Then
f ′′ (x) = −12x + 6

f ′′ (−1) = (−12)(−1) + 6 = 18 > 0

f ′′ (2) = (−12)(2) + 6 = −18 < 0

The second-order condition for a maximum is satisfied at x = 2, and the maximum value of
the function is
f (2) = −2(2)3 + 3(2)2 + 12(2) + 9 = 29

Question 5: Given that a market’s demand equation is

q 2 (4 + p3 ) = 31,

find the elasticity of demand and show that it never exceeds 3/2.

As q ≥ 0, the demand equation gives


√
q= 31(4 + p3 )−1/2

Differentiating this (using the chain rule), we have


√
√ 3 31p2
 
′ 1 3 −3/2 2
q = 31 − (4 + p ) (3p ) = −
2 2(4 + p3 )3/2

The elasticity of demand is


√
q′p 3 31p3 /[2(4 + p3 )3/2 ]
 3 
3 p
ε(p) = − = √ =
q 31/(4 + p3 )1/2 2 4 + p3

As p ≥ 0, we have
p3
<1
4 + p3
=⇒ ε(p) < 3/2

Page 3 of 3

You might also like