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Mid-term exam (ref, offline) 2023-2024 for students

The document outlines the details for the mid-term exam for the Mathematics for Economists module at Westminster International University in Tashkent, scheduled for June 6, 2024. It includes instructions for candidates, the materials allowed in the exam room, and a series of questions covering topics such as set theory, demand functions, production functions, annuities, national income equilibrium, and matrix operations. The marking scheme for each question is also provided.

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otabekolimov05
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10 views3 pages

Mid-term exam (ref, offline) 2023-2024 for students

The document outlines the details for the mid-term exam for the Mathematics for Economists module at Westminster International University in Tashkent, scheduled for June 6, 2024. It includes instructions for candidates, the materials allowed in the exam room, and a series of questions covering topics such as set theory, demand functions, production functions, annuities, national income equilibrium, and matrix operations. The marking scheme for each question is also provided.

Uploaded by

otabekolimov05
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Westminster International University in Tashkent

School of Business and Economics

Refer/Defer Mid-term exam

Module Code: 4ECON007C-n


Mathematics for Economists
Date: 6 June 2024 Time: 10:00-12:00

Venue: IB306/IB307 Time allowed: 2 hours

The following items are provided:


One Examination Question Paper (2 printed pages in total inclusive of cover page) and one
Answer Book (8 printed pages in total inclusive of cover page)
Candidates are permitted to bring into the examination room:

 Non Programmable Calculator

 Black or blue pen

 Ruler

Instructions:

 All answers must be written in the answer book(s) provided.


 All rough work must be written in the answer book(s) provided.
 A line should be drawn through any rough work to indicate to the examiner that it is not part
of the work to be graded.
 Black or Blue pen only must be used for written answers and for all drawings and sketches.
The use of pencils or erasable pens is not permitted.

Ensure you have the correct number of pages on your examination question paper.
Note to Candidates: Please check the Module Code and Module Title to ensure that you
areattempting the correct examination. If in doubt, please contact the Invigilator.

DO NOT TURN OVER THIS PAGE UNTIL INSTRUCTED TO DO SO BY THE INVIGILATOR


Question 1. [20 marks]
a) Let set 𝐴 = {1, 2, 3, 4, 5} represent the set of workers with high educational
attainment, and set 𝐵 = {3, 4, 5, 6, 7} represent the set of workers with high
professional skills. Find the union and the intersection of sets A and B. (6 marks)
b) Find the inverse function of the function 𝑔(𝑥) = 2𝑥 2 − 5 and determine its domain
and range. (14 marks)

Question 2. [15 marks]


The demand function for a product is given by 𝑄 = 200 − 4𝑃 + 0.5𝐴, where 𝑄, 𝑃 and
𝐴 represent quantity demanded, price and advertising expenditure, respectively.
1) Calculate the price elasticity of demand (𝐸𝑃 ) when the price is $25 and advertising
expenditure is $100. (10 marks)
2) If the price rises by 3%, how much percent will the demand fall? (5 marks)

Question 3 [20 marks]


A company's production function is given by 𝑄 = 2𝐾 0.5 𝐿0.5 , where 𝑌 is output, 𝐾 is
capital, and 𝐿 is labor.
a) What are the marginal products of capital and labor when 𝐾 = 25 and 𝐿 = 16?
Briefly interpret their meanings. (10 marks)
b) Compute the marginal rate of technical substitution for 𝐾 = 25 and 𝐿 = 16 and
briefly interpret its meaning. (10 marks)

Question 4. [15 marks]


You are offered the choice between a lump-sum payment of $100,000 or an annuity of
$10,000 per year for 10 years. Which option is better, assuming you can earn 6%
compound interest per year on your investments?
(1+𝑟)𝑛 −1 1−(1+𝑟)−𝑛
Note: Ordinary: 𝑆 = 𝑅 ⋅ ,𝑃=𝑅⋅ .
𝑟 𝑟
(1+𝑟)((1+𝑟)𝑛 −1) (1+𝑟)(1−(1+𝑟)−𝑛 )
Due: 𝑆 = 𝑅 ⋅ ,𝑃=𝑅⋅ .
𝑟 𝑟

Question 5. [15 marks]


In a four-sector national income model, assume the following relationships:
consumption 𝐶 = 300 + 0.6𝑌𝑑 , investment 𝐼 = 200, government spending 𝐺 = 400,
exports 𝑋 = 150, imports 𝑀 = 100, and taxes 𝑇 = 200. Calculate the equilibrium
level of national income.

Question 6. [15 marks]


1 2 −2 3
Given the matrices 𝐴 = ( ) and 𝐵 = ( ), show that: (𝐴𝐵)𝑇 = 𝐵𝑇 𝐴𝑇 .
3 4 7 5
Marking scheme.
Question 1.
a) 𝐴 ∪ 𝐵 = {1,2,3,4,5,6,7}. 𝐴 ∩ 𝐵 = {3,4,5}.
𝑥+5
b) 𝑔−1 (𝑥) = ±√ . 𝑥 ∈ [−5, +∞). 𝑔−1 (𝑥) ∈ (−∞, +∞).
2

Note: 𝑥 ∈ (−∞, +∞). 𝑔(𝑥) ∈ [−5, +∞).


Question 2.
𝑃 25 2
1) 𝐸𝑃 = − 𝑄 ⋅ 𝑄 ′ = − 150 ⋅ (−4) = 3 ≈ 0.67
2
2) %Δ𝑄 = 𝐸𝑃 ⋅ %Δ𝑃 = 3 ⋅ 3% = 2%.
Question 3.
a) 𝑀𝑃𝐾 = √𝐿/𝐾 = √16/25 = 0.8.
One unit increase in capital results in 0.8 units increase in output.
𝑀𝑃𝐿 = √𝐾/𝐿 = √25/16 = 1.25.
One unit increase in labor results in 1.25 units increase in output.
𝑀𝑃𝐾 0.8 16
b) 𝑀𝑅𝑇𝑆 = = 1.25 = 25 = 0.64.
𝑀𝑃𝐿
For one unit decrease in labor, capital must be increased by 0.64 units in order to keep output
constant.
Question 4.
1−(1+0.06)−10
Present value of the ordinary annuity: 𝑃 = 10,000 ⋅ ≈ 73,600.87.
0.06
Since 73,600.87 < 100,000, the first option is better.
Note: The students may misinterpret the question and consider the lump sum is paid at the end of
the 10-year period. Then, the future value of annuity is compared with the lump sum.
Question 5.
𝑌 =𝐶+𝐼+𝐺+𝑋−𝑀 ⇒
𝑌 = 300 + 0.6(𝑌 − 200) + 200 + 400 + 150 − 100 ⇒
𝑌 = 2,075
Question 6.
1 2 −2 3 12 13
a) 𝐴𝐵 = ( )( )=( )
3 4 7 5 22 29
𝑇
(𝐴𝐵)𝑇 = (12 13) = (12 22)
22 29 13 29
𝑇
1 2 1 3
b) 𝐴𝑇 = ( ) =( )
3 4 2 4
−2 3 𝑇 −2 7
𝐵𝑇 = ( ) =( )
7 5 3 5
−2 7 1 3 12 22
𝐵 𝑇 𝐴𝑇 = ( )( )=( )
3 5 2 4 13 29

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