Dcp,tr~mein 0i Economics ECN 231 I Quiz 2

__________________________________
. 11ctie;~,s: Aw;wcr all Questions
....ln~!;· Duration : 40 Minutes

<.>ucstion One

Consider a market with the demand function Pd = 113 - Q 2 and the supply function

a) Compute the market equilibrium price and quantity for this market.
b) Compute and interpret the consumer's surplus for this market at the equilibrium.
c) Compute and interpret the producer's surplus for this market at the equilibrium.
d) Show the consumer and producer surplus you have computed on the same graph.

Qucsiion Two

a) State the formula of the generalized ntfi-degree polynomial of the Taylor formula.
b) A rough estimate of the minerals in a country at the beginning of the 2001 was 300
millica tons. Extraction in that year was 50 million tons.
i) When will the reserves be exhausted if extraction is kept constant?
ii) Suppose that due to the increasing depth of the mineral wh ich translate to
increasing cost of extraction, c:xtraction declines every year by 15 percent. For
ho\\' long will the mineral last?
r ,
Question Three ' f-11) ( PJ t , )
Consider the fo llowing system ofequat ,011,

4X1 -f- J ., z ·-· /i '

2x 1 +- Sx 2 = 42
Solve for the unknowns using matrix inversion.
rz_o (0 t- r) ~ 1 1"'

Em/ of Quiz 2 cp 7 56
p
Department of Economics ECN 2311 Test 1

Instructions: .A.nswcr all Questions Duration: 60 Minutes

--·- · -----~--------------
Question One

Define the following

(i) A set
(ii) Continuity of a function
(iii) Differentiability of a function
(iv) Optimisation
b) State the second order total differenti al

Question Two

a) Compare and contrast between a iimit of a function and continuity of a function

b) lntt:iti\·ely explain the Lagrange multiplier and its use in constrained optimisation
c) Use the Euler' s theorem to determine the degree of homogeneity of the following
function

Question Three
a) Given the following function s:

f( x ) =f xz,x ~ 2.
ls - x,x > 2.
(i) Sketch the functions -for the domain (-1,5)
(ii) Detennine the limit and cor,tinuity of the functions at x=2.
b) Find the derivate of y = xlnx - x

End of Test 1
Department of Economic!> ECN 2311 Test 2

Instructions: Answer all Questions Duration: 90 Minutes

Question One

Evaluate the following

(i) f dx
(ii) f 4x3 dx
(iii) J
0
\ ~ dx

Question Two
1 .,
a ) ,\ lim1 cxpc..:t:,, 11:.. :..ale:.. tu grow by 12% per montl1. If 11s '.larluii1y sale,. fig ure is ~9,200
per month what will its expected total annual sales be?
b) Dctcnninc if the following vectors are linearly independent

c) State the condition required for two matrices A and B to be added and to be multiplied
Que!ltion Three

In a l\\ o-,ndu:.tl) economy, it i:, known that industry I uses IO ngwcc of its own product and
60 ng,\ cc of commodity II to produce a kwacha's worth of commodity I; industry II uses none
of its own product but uses 50 ngwec of commodity I in producing a kwacha' s worth of
commodi ty II : and the open sector demands K 1,000 billion of commodity I and K2,000 billion
of commodity II.

a) Write out the input matrix , the Leonticf matrix, and the specific input-output matrix

equati on for thi'> economy.

b) Whal i:, the :,olution output levels for the two industries'!

Question Four

So lve the following linear programming problem

Maximise 2X1 + SX2 subject lo

'2-><1 Y3)x'3
E11do/Te.'it 2
/rzy f s i
(
,r I 'L , ,., ,. er ,...1 (f.O 2.. l(/ 12
' .,..J
Cl
·11, 1 rr er~ lo 3 ,?, 6U
I 1
2.J 7. 2,.,x I
 Question One

a) If U = set of all students in the University of Zambia (UNZA),

A = set of all students who are in the first year in UNZA,
B = ser of all maie st..dents in u1~ZA,
C = set of foreign students in UNZA,
Explain the following sets in words:
(i) A- B;
(ii) B' nC
(iii)A n B'
(iv)A n (B n C)
b) Enumerate all the subsets of the set {S, 6, 7}.
c) Explain the difference between the null set and an empty set.

Question Two
a) Define a sequence

3x 2 - Sx
lim---
x -+4 X +6

c) Use the Euler' s theorem to determin e the degree of homogen eity of the followin g
CES
production function :
Q = [aK - P + (1 - a)L -p]-yf p

Question Three
a) Locate all the extreme points of the following function:

f(X) = X 3 - 1sx2 + nx + 10
b) A perfectly competit ive firm 's total cost function is given as:
2
TC ~ j Q 3 - 4.SQ 2 + 7.4Q
Where TC is total cost and Q is output.
Jfthe market price is 28, how much will the firm produce? How large will its profits be?

Page 1 of3
/'} q>1-~ ~~-4 ~
0
rp '<-, lf-5 v- z...~
Question Four
Serie s and the Taylo r series .
a) Expla in the key differ ence betwe en the Macla urin
ical coeff icient s and the Leon tief matri x
b) Expla in the differ ence betwe en the matri x of techn
c) Solve the follow ing linear progr ammi ng probl em
Maxi mise 8X1 + 3X2 subje ct to
+ l.SX2 and Xi ~ 0, X2 ~ 0
Xi + 2.SX2 $ 20, 3Xi $ 18,

Ques tion Five

A firm ' s profit functi on is given by:

n = 12x1 - xf + 24Xz -1.s xf
The firm is faced with a resou rce const raint given by:
2Xi + X2 = 27
um profit assum ing the firm is
a) Calcu late the profit -maxi mizin g outputs and the maxim
faced uncon strain ed optim isatio n.
profit maxim izatio n probl em
b) Assum ing const rained optim isatio n, set up the firm's

d) Is the suffic iency condi tion satisfied? Explain.

have obtain ed in the absen ce of
e) Comp are the result s in (°') with the results you would
the resou rce const raint.

Ques tion Six

a) What are the prope rties of determ inants ?

opera tion, an electr ic powe r-gen eratin g
b) A town has three main indus tries: a coal-mining
minin g opera tion must purch ase
plant, and a local railroad . To mine K 1 of coal, the
wee of transp ortati on for its
25ng wee of electricity to run its equipment and 25ng
ating plant requir es 65ng wee of
shipp ing needs . To produ ce K 1 of electricity, the gener
ary equip ment, and Sngw ee of
coal for fuel , Sngw ee of its own electricity to run auxili
ao requir es 55ng wee of coal for
:ransport.ation. To provi de KI of transportati on, the raiiro
ment. In a certai n week , the coal
fuel and 10ng wee of electr icity for its auxiliary equip
from outsid e the town and the
minin g opera tion receiv es order s for KS0 ,000 of coal

Page 2 of 3
 f.l'l\l~rnling pl:111t rl-rl·ivl' s onk1 s I'm /, :>\ 000 ol\:lt;ctridty fro111 ollt sidl:. Thl~rr. is 110 out side
demand for the lm·nl rnilnmd , \ Isl' ( 'rnnwr' s ruh~nwthml 1111d ddL'rtt1i11c how much mw,t
each of till' three industries prndlll'l' in tlrnt Wl'l'k to cxnl'lly sntisfy their own dcmancl and
the outside dcmnml'l

= = = = == === -== -== === == = = = = = == i

1-:ND ()I,' t•:XAMINATION II