Scribd
Upload
74 views

Chapter 4 - Solutions

1. The first function is decreasing at x=4 and stationary at x=4. 2. The second function is convex with a critical point of x=3. 3. The third function has relative minima at x=0 and x=4, a relative maximum at x=2, and another function with an inconclusive test at x=8.

Uploaded by

hn
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
74 views

Chapter 4 - Solutions

1. The first function is decreasing at x=4 and stationary at x=4. 2. The second function is convex with a critical point of x=3. 3. The third function has relative minima at x=0 and x=4, a relative maximum at x=2, and another function with an inconclusive test at x=8.

Uploaded by

hn
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/ 2

Chapter 4

1. • ∂dy
∂dx
= 3x2 − 14x + 6

∂dy
∂dx
(4) = 48 − 56 + 6 = −2 → Decreasing function

• ∂dy
∂dx
= 4x3 − 18x2 + 8x

∂dy
∂dx
(4) = 256 − 288 + 32 = 0 → Stationary function

2. ∂dy
∂dx
= 2(5x2 − 8)(10x) = 20x(5x2 − 8) = 100x3 − 160x

∂d2 y
∂dx2
= 300x2 − 160

∂d2 y
∂dx2
(3) = 2540 > 0 → Convex Function

3. • ∂dy
∂dx
= 8x3 − 48x2 + 64x = 0

Critical Values: x = 0, x = 2, x = 4

∂d2 y
∂dx2
= 24x2 − 96x + 64

∂d2 y
∂dx2
(0) = 64 > 0 → Relative Minimum (Convex Function)

∂d2 y
∂dx2
(2) = −32 < 0 → Relative Maximum (Concave Function)

∂d2 y
∂dx2
(4) = 64 > 0 → Relative Minimum (Convex Function)

• ∂dy
∂dx
= −4(x − 8)3 = 0

Critical Values: x = 8

∂d2 y
∂dx2
= −12(x − 8)2

∂d2 y
∂dx2
(8) = 0 Inconclusive Test

∂d3 y
∂dx3
= −24(x − 8)

∂d3 y
∂dx3
(8) = 0 Inconclusive Test

∂d4 y
∂dx4
= −24

1
∂d4 y
∂dx4
(8) = −24 → Relative Maximum (n is even)

4. AC = Q2 − 21Q + 500
∂dAC
∂dQ
= 2Q − 21 = 0 → Q = 10.5
∂d2 AC
∂dQ2
= 2 → Relative Minimum
AC(10.5) = 389.75
5. U ′ (W ) = ∂dU
∂dW
= α
W +1
> 0, given W ≥ 0, α > 0
U ′′ (W ) = ∂d2 U
∂dW 2
= − (W +1)
α
2 < 0, Risk-Aversion

′′
R(W ) = − UU ′ (W
(W )
)
W = W
W +1
2)
∂d(σP
6. ∂da
= 2aσA2 − 2(1 − a)σB2 = 0
2
σB
a= 2 +σ 2
σA B

∂d2 (σP
2)

∂da 2 = 2(σA2 + σB2 ) > 0


( 2
)
= √σA2 σB 2
σB
σP2 a= 2 2
σA +σB σA +σB

7. • ∂dy
∂dx
= 2e4x (1 + 4x) = 0 ⇒ x = −1/4

∂d2 y
∂dx2
= 16e4x (1 + 2x)

∂d2 y
∂dx2
(−1/4) = 16e−1 (1/2) > 0

• ∂dy
∂dx
= 2x−6
x2 −6x+10
=0⇒x=3

∂d2 y 2(x2 −6x+10)−(2x−6)2


∂dx2
= (x2 −6x+10)2

∂d2 y
∂dx2
(3) =2>0

You might also like