ECON 104: Mathematics for Economics

SMU School of Economics; Fall 2024

Answer Key to Homework Assignments
Instructor: Takashi Kunimoto
September 19, 2024

You are supposed to upload your work (in pdf file) under “Assignments”
on our class website (on eLearn) by 17:00 on the date specified below. You
only need to submit your answer to the odd numbered questions. For example,
in HW#1, we have Questions 1.1, 1.2, 1.3, 1.4, 1.5, 1.6, and 1.7. You are
only required to answer Questions 1.1, 1.3, 1.5, and 1.7. Of course, you are
strongly encouraged to answer “all” of the questions (including even-numbered
questions), as they are the good proxies for the types of questions you will have
in the midterm and final exams.

1 Homework 1 (Due Date: Aug 29 (Thu), 2024

Question 1.1 (30 points) In each of the following implications, where x, y,
and z are real numbers, decide: (i) if the implication is true; and (ii) if the
converse implication is true.
√
1. x = 4 ⇒ x = 2.
√
It is true and the converse implication is also true because 4 = 2.

2. (x = 2 and y = 5) ⇒ x + y = 7.

It is true but the converse implication is false because (x = 3 and y =

4) ⇒ x + y = 7.

3. (x − 1)(x − 2)(x − 3) = 0 ⇒ x = 1.

It is false because x could be 2 or 3 as well as 1. However, the converse

implication is true.

1
 4. x2 + y 2 = 0 ⇒ x = 0 or y = 0.

It is true but the converse implication is false because we have a coun-

terexample when x = 0 and y = 1.

5. (x = 0 and y = 0) ⇒ x2 + y 2 = 0.

It is true and the converse implication is also true.

6. xy = xz ⇒ y = z.

It is false because we have xy = xz when x = 0, y = 1, and z = 2.

However, the converse implication is true.

Question 1.2 Determine which of the following formulas are true. If any
formula is false, find a counter-example to demonstrate this.

1. A ⊆ B ⇔ A ∪ B = B.

It is true.

2. A ⊆ B ⇔ A ∩ B = A.

It is true.

3. A ∩ B = A ∩ C ⇒ B = C.

It is false because we can set A = {1}; B = {1, 2}; and C = {1, 3} so

that A ∩ B = A ∩ C = {1} but B ̸= C.

4. A ∪ B = A ∪ C ⇒ B = C.

It is false because A = {1, 2, 3}; B = {2}; and C = {3} so that A ∪ B =

A ∪ C = {1, 2, 3} but B ̸= C.

5. A = B ⇔ (x ∈ A ⇔ x ∈ B).

It is true because A = B ⇔ (A ⊆ B) and (A ⊇ B) ⇔ (x ∈ A ⇒ x ∈ B)

and (x ∈ B ⇒ x ∈ A) (i.e., for any x, (i) whenever x ∈ A. then x ∈ B
and whenever x ∈ B, then x ∈ A.)

Question 1.3 (25 points) Let f (x) = x/(1+x2 ). Answer the following ques-
tions.

2
 √ √
1. Compute f (−1/10), f (0), f (1/ 2), f ( π), and f (2).

−1/10 10
f (−1/10) = =−
1 + 1/100 101
f (0) = 0
√ √
√ 1/ 2 2
f (1/ 2) = =
1 + 1/2 3
√
√ π
f ( π) =
1+π
2 2
f (2) = 2
= .
1+2 5

2. Show that f (−x) = −f (x) for all x and that f (1/x) = f (x) for x ̸= 0.
−x x
f (−x) = 2
=− = −f (x)
1 + (−x) 1 + x2
1/x x
f (1/x) = 2
= 2 = f (x).
1 + 1/x x +1

Question 1.4 Let f (x) = 3x2 + 2x − 1. Answer the following questions.

1. Show that for all h ̸= 0,

f (x + h) − f (x)
= 6x + 2 + 3h,
h
′
and use this result to find f (x).

f (x + h) − f (x) 3(x + h)2 + 2(x + h) − 1 − (3x2 + 2x − 1)

=
h h
6xh + 3h2 + 2h
=
h
= 6x + 2 + 3h (∵ h ̸= 0).

′ f (x + h) − f (x)
f (x) = lim = 6x + 2.
h→0 h
′ ′ ′
2. Find the value of f (0), f (−2), and f (3).
′
f (0) = 2
′
f (−2) = −10
′
f (3) = 20.

3
Question 1.5 (20 points) A firm’s profit function is π(q) = 24q − q 2 − 5,
where q denotes the quantity of the good supplied. Find the marginal profit,
′
i.e., π (q), and the value of q which maximizes profits.

′
π (q) = 24 − 2q.
Therefore, we have 
 > 0 if 0 < q < 12
′
π (q) = 0 if q = 12
< 0 if q > 12.


This implies that π(q) is increasing over [0, 12) and decreasing over (12, ∞).
Thus, the profit is maximized at q = 12.

Question 1.6 Find the derivatives of the following:

1. x6 .
′
(x6 ) = 6x5 .

2. 3x11 .
′
(3x11 ) = 33x10 .

3. x50 .
′
(x50 ) = 50x49 .

4. −4x−7 .
′
(−4x−7 ) = 28x−8 .
x12
5. 12
.
′
x12

= x11 .
12
−2
6. x2
.
 ′
−2 ′
= (−2x−2 ) = 4x−3 .
x2
3
7. 3 x.
√
 ′
3 ′
√ = (3x−1/3 ) = −x−4/3 .
3
x
−2
8. √ .
x x
 ′
−2 ′
√ = (−2x−3/2 ) = 3x−5/2 .
x x

4
Question 1.7 (25 points) Differentiate the following functions.
√
1. f (x) = 8x4 + 2 x.
′
f (x) = 32x3 + x−1/2 .
√
2. f (x) = x−1 (x2 + 1) x.
′ √ √ 1
f (x) = −x−2 (x2 + 1) x + x−1 (2x) x + x−1 (x2 + 1) x−1/2
  2
1 3 1
= x−3/2 −x2 − 1 + 2x2 + (x2 + 1) = x1/2 − x−3/2 .
2 2 2

3. f (x) = √1 .
x3
′ ′ 3
f (x) = (x−3/2 ) = − x−5/2 .
2
√
x−2
4. f (x) = √
x+1
.
1 −1/2 1/2
′
2
x (x + 1) − (x1/2 − 2) 12 x−1/2 3
f (x) = √ 2
= √ √ .
( x + 1) 2 x( x + 1)2

x2 +x+1
5. f (x) = x2 −x+1
.

′ (2x + 1)(x2 − x + 1) − (x2 + x + 1)(2x − 1)

f (x) =
(x2 − x + 1)2
(2x3 − 2x2 + 2x + x2 − x + 1) − (2x3 + 2x2 + 2x − x2 − x − 1)
=
(x2 − x + 1)2
−2(x2 − 1)
= .
(x2 − x + 1)2

2 Homework 2 (Due Date: Sep 5 (Thu), 2024)

Question 2.1 (20 points) Use the chain rule to find dy/dx for the following:

1. y = 5u4 , where u = 1 + x2 .
dy du
dy/dx = · = 20u3 · (2x) = 40x(1 + x2 )3 .
du dx

2. y = u − u6 , where u = 1 + 1/x.
  (  5 )
dy du 1 1 1
dy/dx = · = (1 − 6u5 ) · − 2 = − 2 1 − 6 1 +
du dx x x x

5
Question 2.2 Compute the following limits.

1. limx→2 (x2 + 3x − 5).

= (lim x)(lim x) + 3(lim x) − 5

x→2 x→2 x→2
= 2 · 2 + 3 · 2 − 5 = 5.

1
2. limy→−3 y+8
.

1 1 1
= = = .
(limy→−3 y) + 8 −3 + 8 5

x3 −2x−1
3. limx→0 x5 −x2 −1
.

(limx→0 x)3 − 2 limx→0 x − 1

=
(limx→0 x)5 − (limx→0 x)2 − 1
03 − 2 · 0 − 1
= = 1.
05 − 02 − 1

x3 +3x2 −2x
4. limx→0 x
.

= lim (x2 + 3x − 2) = (lim x)2 + 3 lim x − 2 = −2.

x→0 x→0 x→0

(x+h)3 −x3
5. limh→0 h
, where h ̸= 0.

x3 + 3x2 h + 3xh2 + h3 − x3
= lim = lim (3x2 + 3xh + h2 ) = 3x2 .
h→0 h h→0

Question 2.3 (20 points) Compute the second derivatives of the following:

1. y = x5 − 3x4 + 2
′
y = 5x4 − 12x3
′′
y = 20x3 − 36x2 .
√
2. y = x.
′ 1 −1/2
y = x
2
′′ 1
y = − x−3/2 .
4

6
 3. y = (1 + x2 )10 .
′
y = 10(1 + x2 )9 · 2x = 20x(1 + x2 )9
′′
y = 20(1 + x2 )9 + 20x · 9(1 + x2 )8 · 2x = 20(1 + x2 )9 + 360x2 (1 + x2 )8
= 20(1 + x2 )8 (1 + 19x2 ).
√
4. y = 1 + x2 .
′ 1
y = (1 + x2 )−1/2 · 2x = x(1 + x2 )−1/2
2
′′ −1
y = (1 + x2 )−1/2 + x · (1 + x2 )−3/2 · 2x = (1 + x2 )−1/2 − x2 (1 + x2 )−3/2
2
= (1 + x2 )−3/2 (1 + x2 − x2 ) = (1 + x2 )−3/2 .

Question 2.4 Find the first and second derivatives of the following:

1. y = e−3x
′
y = e−3x · (−3) = −3e−3x
′′
y = −3e−3x · (−3) = 9e−3x
3
2. y = 2ex
′ 3 3
y = 2ex · 3x2 = 6x2 ex
′′ 3 3 3
y = 12xex + 6x2 ex · 3x2 = 6xex (3x3 + 2)

3. y = e1/x

−e1/x
 
′ −1
y = e 1/x
· = −x−2 e1/x
=
x2 x2
 
′′ −3 1/x −2 1/x −1
y = 2x e − x e · = 2x−3 e1/x + x−4 e1/x
x2
= x−4 (2x + 1)e1/x
2 −3x+1
4. y = 5e2x
′ 2 −3x+1 2 −3x+1
y = 5e2x · (4x − 3) = 5(4x − 3)e2x
′′ 2 −3x+1 2 −3x+1 2 −3x+1
y = 20e2x + 5(4x − 3)e2x · (4x − 3) = 5e2x (4 + (4x − 3)2 )
2 −3x+1
= 5(16x2 − 24x + 13)e2x .

Question 2.5 (20 points) Determine the domains of the following functions:

7
 1. y = ln(x + 1)

We must have x+1 > 0 to make ln(x+1) well-defined. This is equivalent

to x > −1. The domain is (−1, ∞).

2. y = ln 3x−1


1−x

We must satisfy the following two conditions:

3x − 1
1 − x ̸= 0 and > 0.
1−x
This is equivalent to x ∈ (1/3, 1).

3. y = ln |x|

We must have x ̸= 0. So, the domain is (−∞, 0) ∪ (0, ∞).

Question 2.6 Find the intervals where the following functions are nondecreas-
ing:

1. y = (ln x)2 − 4

First, we need to satisfy x > 0 to make the function well-defined. Second,

′
we compute y :

> 0 if x > 1
′ 1 2 ln x 
y = 2(ln x) · = = 0 if x = 1
x x 
< 0 if 0 < x < 1

Therefore, the desired interval is [1, ∞).

2. y = ln(ex + e−x )

Observe that ex and e−x are always positive for any x ∈ R. We compute
′
y: 
x −x −x 2x > 0 if x > 0
′ e −e e (e − 1) 
y = x = = 0 if x = 0
e + e−x ex + e−x 
< 0 if x < 0
Thus, the desired interval is [0, ∞).

3. y = x − 23 ln(x2 + 2)

8
 Since x2 + 2 > 0 for any x ∈ R, the given function is always well-defined.
′
We compute y :

2 > 0 if x > 2 or x < 1
′ 3 2x x + 2 − 3x (x − 1)(x − 2) 
y = 1− 2 = = = 0 if x = 2 or x = 1
2x +2 x2 + 2 x2 + 2
< 0 if 1 < x < 2


Therefore, the desired interval is (−∞, 1] ∪ [2, ∞).

Question 2.7 (20 points) Consider the following macroeconomic model:

1. Y = C + I
2. C = f (Y − T )
3. T = α + βY ,
where Y is GDP; C is consumption, T denotes taxes, and α and β are con-
′
stants. Assume that f ∈ (0, 1) and β ∈ (0, 1). Answer the following questions.

1. From the three equations above, derive the equation Y = f ((1 − β)Y −
α) + I.

Plugging equations 2 and 3 into 1, we obtain

Y = f (Y − (α + βY )) + I = f ((1 − β)Y − α) + I.

2. Differentiate the equation Y = f ((1 − β)Y − α) + I with respect to I and

find an expression for dY /dI.
dY ′ dY
= f ((1 − β)Y − α) · (1 − β) · + 1.
dI dI
So, we obtain
dY 1
= ′ .
dI 1 − (1 − β)f ((1 − β)Y − α)

3. Examine the sign of dY /dI.

′
Since β ∈ (0, 1) and f ((1 − β)Y − α) ∈ (0, 1), we have dY /dI > 0.

Question 2.8 The function f is defined over all x ∈ [−2, 2] by the formula
1 √
f (x) = x3 4 − x2 .
3
Answer the following questions.

9
 1. Find the intervals where f non-decreases, and the intervals where f non-
increases.

First, we observe that 4−x2 ≥ 0 to make f (·) well-defined. This is indeed

′
the domain given. Second, we compute f (x):
′ x3 1
f (x) = x2 (4 − x2 )1/2 + · (4 − x2 )−1/2 · (−2x)
3 2
x2 2 −1/2 4x2 √ √
2 2
(4 − x2 )−1/2 ( 3 + x)( 3 − x)

= (4 − x ) 3(4 − x ) − x =
3 3
√
Note that 1 < 3 < 2. Therefore,
 √ √
 < 0 if x ∈ (√ 3, 2) or x√∈ ( − 2, − 3)
′
f (x) = 0 if x = 3, √0, or − 3√
> 0 if x ∈ (− 3, 0) ∪ (0, 3),


′ ′
while f (2) and f (−2) are undefined.
2. Sketch the graph of f .
√ √
We note
√ the √ following: f (−2) = f (2) = f (0) = 0 and f ( 3) = 3 and
f (− 3) = − 3.
√
3. Explain why f has an inverse g on [0, 3].
√ √
Since f (·) is strictly increasing over (− 3, √3), it is a one-to-one func-
tion. Thus, f has an inverse function on [0, 3].
′ √
√
4. Find g 31 3 . (Hint: f (1) = 13 3).
√ √
We know that f (·) has an inverse function on [0, 3] and 1 ∈ [0, 3]. So,
by the inverse function theorem, we obtain
√
1√
 
′ 1 3 3
g 3 = ′ = .
3 f (1) 8

Question 2.9 (20 points) Let f (x) = (1 + x)m , where m is any real number.
Answer the following questions.

1. Prove that f (x) ≈ 1 + mx for x close to 0.

′
First, we compute f (x) = m(1 + x)m−1 . By the formula of linear ap-
proximation, we obtain
′
f (x) = f (0 + x) ≈ f (0) + f (0)x,

10
 for any x close to 0. We obtain the desired expression after we acknowl-
′
edge that f (0) = 1 and f (0) = m.
2. Use the formula above, find approximations to the following numbers:
√
3 1 1/3


(a) 1.1 = 1 + 10

We observe that x = 1/10 and m = 1/3. So,

√
3 1 1 1
1.1 ≈ 1 + =1+ .
3 10 30
√
5 1 1/5


(b) 33 = 2 1 + 32
 1/5
1 1 1 1
1+ ≈1+ =1+ .
32 5 32 160
So, we have
√
5 1
33 = 2(1 + 1/160) = 2 + .
80
√
3
√
3
(c) 9= 8+1
We first note the following:
√3
√
3
p
8 + 1 = 23 + 1 = 2 3 1 + 1/8.

Setting x = 1/8 and m = 1/3, we obtain

p
3 11 1
1 + 1/8 = 1 + =1+ .
38 24
Therefore,
√
3 1
8 + 1 = 2(1 + 1/24) = 2 + .
12
(d) (0.98)25 . We first observe the following:

(0.98)25 = (1 − 0.02)25 .

Set x = −0.02 and m = 25. So, we obtain

(0.98)25 ≈ 1 + 25 · (−0.02) = 1 − 0.5 = 0.5.

Question 2.10 For what value of a is the following function continuous for
all x? 
ax − 1 if x ≤ 1
f (x) =
3x2 + 1 if x > 1

11
 It is easy to see that f (·) is a continuous function at any point other than
x = 1. This is because we know that ax − 1 and 3x2 + 1 are continuous
functions. If we want to make f (·) continuous at x = 1, we must have the
following condition:
lim− f (x) = lim+ f (x).
x→1 x→1

This is equivalent to the following:

a − 1 = 4.

So, we must have a = 5.

3 Homework 3 (Due Date: Sep 12 (Thu), 2024)

Question 3.1 (20 points) Evaluate the following limits:

1. limx→0+ (x2 + 3x − 4)

Since x2 + 3x − 4 is a continuous function of x, we simply have

lim+ (x2 + 3x − 4) = −4.

x→0

x+|x|
2. limx→0− x

We observe that limx→0− (x + |x|) = limx→0− (−|x| + |x|) = 0. So,

x + |x|
lim− = 0.
x→0 x
x+|x|
3. limx→0+ x
x + |x| |x| + |x|
lim+ = lim+ = 2.
x→0 x x→0 |x|
−1
4. limx→0+ √
x
−1
lim+ √ = −∞.
x→0 x
x
5. limx→3+ x−3
x
lim+ = +∞.
x→3 x−3
x
6. limx→3− x−3
x
lim− = −∞.
x→3 x−3

12
Question 3.2 Evaluate the following limits. You are required to be clear about
the whole process of how you come to your evaluation for each limit.
1.
x−4
lim
x→∞ x2 + 1
1 4


x−4 1 − 0·1
lim 2 = lim x x
2
= = 0.
x→∞ x + 1 x→∞ 1 + 1/x 1
2. r
2 + 5x
lim
x→−∞ x−1
s
0+5 √
r r
2 + 5x 2/x + 5
lim = lim = = 5.
x→−∞ x−1 x→−∞ 1 − 1/x 1
3.
(ax + b)2
lim ,
x→∞ (a − x)(b − x)

where a, b are some constants.

2
(ax + b)2 a2 x2 + 2abx + b2 a2 + 2ab + xb 2 a2 + 0 + 0
lim = lim = lim ab a+bx
= = a2 .
x→∞ (a − x)(b − x) x→∞ ab − (a + b)x + x2 x→∞ 2 − +1 0−0+1
x x

Question 3.3 (20 points) Find the (global) maximum or minimum points
for the following functions.
1.
8
f (x) =
+43x2
f achieves the maximum of f at x = 0.
2.
f (x) = 5(x + 2)4 − 3
Due to the perfect square form of f above, we conclude that x = −2 is
the minimum point of f .
3.
1
f (x) =
1 + x4
for x ∈ [−1, 1]

x = 0 is the maximum point of f and x = −1, 1 are the minimum point

over [−1, 1].

13
 4.
−2
f (x) =
2 + x2
f achieves the minimum at x = 0.
5. √
f (x) = 2 − 1−x
f is well-defined when x ≤ 1. Then, f achieves the maximum at x = 1.
6.
2
f (x) = 100 − e−x
f achieves the minimum at x = 0.
Question 3.4 Find possible extreme (i.e., local maximum or minimum) points
for f (x) = x3 ln x, for x ∈ (0, ∞).
′
First, we compute f (x):
′ 1
f (x) = 3x2 ln x + x3 · = x2 (3 ln x + 1)
x
′′
Since x > 0, the only stationary point is x = e−1/3 . Second, we compute f (x):

 
1  > 0 if x > e−5/6
′′ 2
f (x) = 2x(3 ln x + 1) + x · 3 = x(6 ln x + 5) = 0 if x = e−5/6
x
< 0 if x < e−5/6 .


Because e−1/3 = e−2/6 > e−5/6 , x = e−1/3 is a local minimum point.

Question 3.5 (20 points) Answer the following questions regarding a single
firm’s behavior.
√
1. A firm produces Q = 2 L units of a commodity when L units of labor
are employed. If the price obtained per unit is $160, and the price per
unit of labor is $40, what value of L maximizes profits π(L)?

The profit function of the firm is obtained as

√ √
π(L) = 160 · 2 L − 40L = 320 L − 40L.
′
First, we check the first-order condition π (L) = 0:
′
π (L) = 160L−1/2 − 40 = 0 ⇒ L = 16.
′′
Since π (L) = −80L−3/2 < 0 for each L > 0, π(L) is a strictly con-
cave function. Therefore, L = 16 is the profit maximzing unit of labor
employed.

14
 2. A firm produces Q = f (L) units of a commodity when L units of labor are
′ ′′
employed. Assume that f (L) > 0 and f (L) < 0. If the price obtained
per unit is 1 and price per unit of labor is w, what is the first-order
condition for maximizing profits at L = L∗ ?

Let us define the profit function of the firm:

π(L) = f (L) − wL.
Taking the first-order condition of π(L), we obtain
′ ′ ′
π (L) = f (L) − w = 0 ⇒ f (L∗ ) − w = 0.
′′ ′′
Because π (L) = f (L) < 0, π(L) is a strictly concave function. There-
′
fore, L∗ satisfying f (L∗ ) − w = 0 is the unit of labor employed to maxi-
mize profits.
3. By implicitly differentiating the first-order condition in the previous ques-
tion with respect to w, find how L∗ changes when w change.
′
Define g(w, L) = f (L) − w = 0 as an implicit function of w and L. Since
∂g/∂L < 0, by the implicit function theorem, we obtain
dL∗ ∂g/∂w −1
=− = − ′′ < 0.
dw ∂g/∂L f (L)
This means that L∗ decreases as w increases.
Question 3.6 Let f be a single variable function defined as follows:
 
1 1+x
f (x) = ln .
2 1−x
Answer the following questions.
1. What is the domain of f ?

For f to be well-defined, we must have (1 + x)/(1 − x) > 0. This implies

that −1 < x < 1, which is the domain of f .
2. Show that f is a strictly increasing function over the domain you found
in the previous question.

We take the derivative of f :

′ 1 1 1 · (1 − x) − (1 + x) · (−1) 1
f (x) = 1+x · = ,
2 1−x (1 − x)2 (1 + x)(1 − x)
which is positive for any x ∈ (−1, 1). Thus, f is strictly increasing.

15
3. Show that the range of f is (−∞, ∞).

We check the following facts:

lim f (x) = ∞
x→1−
lim f (x) = −∞
x→−1+

Combining these facts with the strict increasingness of f , we conclude

that the range of f is (−∞, ∞).

4. Argue why f has an inverse function g.

Since we have shown that f is a strictly increasing function, we can say

that f is a one-to-one mapping. This guarantees that f has an inverse
function g.

5. Derive the inverse function g explicitly.

 
1 1+x
y = ln
2 1−x
 
1+x
⇔ 2y = ln
1−x
1+x
⇔ e2y =
1−x
2y
e −1
⇔ x = 2y .
e +1
Therefore, we obtain
e2y − 1
g(y) = 2y
e +1
as the inverse function of f .
′
6. Find g 12 ln 2 .

′ e2y · 2(e2y + 1) − (e2y − 1) · e2y · 2 4e2y

g (x) = = 2y .
(e2y + 1)2 (e + 1)2

Thus,  
′ 1 4·2 8
g ln 2 = 2
= .
2 (2 + 1) 9

16
Question 3.7 (20 points) Consider the monopolist who faces the inverse de-
mand function P (Q) = a − Q. Assume that k is the cost of producing one unit
of output and 0 < k < a. Answer the following questions.

1. Find the profit maximizing output Q∗ and the associated monopoly profit
π(Q∗ ).

We define the profit function of the monopolist:

2
(a − k)2

2 a−k
π(Q) = P (Q)Q−kQ = (a−Q)Q−kQ = −Q +(a−k)Q = − Q − + .
2 4

Thus, π(Q) achieves the maximum of (a − k)2 /4 at Q∗ = (a − k)/2.

2. How does the monopoly profit react to changes in k? (Hint: Find

dπ(Q∗ )/dk)

In the previous question, we have the maximized profit as π(Q∗ ) = (a −

k)2 /4. So,

a−k a−k
dπ(Q∗ )/dk = · (−1) = − < 0 (because a > k)
2 2

3. The government argues that the monopoly produces too little. It wants
to induce the monopolist to produce Q̂ = a − k units by granting a
subsidy s per unit of output. Calculate the subsidy s required to reach
the target.

In the presence of subsidy, we define the profit function of the monopolist

as follows:
2
(a + s − k)2

a+s−k
π̂(Q) = P (Q)Q+sQ−kQ = (a−Q)Q+sQ−kQ = − Q − +
2 4

In this case, π̂ achieves the maximum at Q = (a + s − k)/2. So, what we

want is
a+s−k
Q̂ = a − k = ⇒ s = a − k.
2
Question 3.8 Let f (x) = 4x2 − 40x + 80 for x ∈ [0, 8]. Answer the following
questions

1. Draw the graph of f (x).

Omitted.

17
 2. Find the maximum and minimum of f (x) over [0, 8].

Since f is a continuous function and [0, 8] is a bounded, closed interval in

R, due to the extreme value theorem, f has the maximum and minimum
over [0, 8]. Next, we compute the following:
′
f (x) = 8x − 40 = 8(x − 5)
′′
f (x) = 8 > 0.

This means that f is a strictly convex function. So, x = 5 is the minimum

point of f and the minimum value is -20. Note that f (0) = 80 and
f (8) = 16. Hence, x = 0 is the maximum point of f and the maximum
value is 80.

Question 3.9 (20 points) Consider the function f defined for all x ∈ R by
f (x) = x3 − 12x. Find the stationary points of f , and classify them by using
both the first- and second-order conditions.
′
We first complete f (x):
′
f (x) = 3x2 − 12 = 3(x2 − 4) = 3(x + 2)(x − 2).
′′
So, x = 2, −2 are the stationary points of f . Next, we compute f (x):
′′
f (x) = 6x.
′′
Since f (−2) = −12 < 0, x = −2 is a local maximum point. And since
′′
f (2) = 12, x = 2 is a local minimum point.

Question 3.10 Consider the function f defined for all x ∈ [−1, 1] by


x if x ∈ (−1, 1)
f (x) =
0 if x = −1 or x = 1

Answer the following questions.

1. Is this function continuous? If so, verify it. If not, argue why.

We claim that this function is not continuous at x = 1. This is because

lim f (x) = 0 ̸= 1 = lim− f (x).

x→1+ x→1

2. Does the function f attain maximum or minimum? If so, provide them

explicitly. If not, argue why?

18
 We claim that f achieves neither maximum nor minimum. Suppose by
way of contradiction that there is the maximum point x∗ ∈ (−1, 1).
Define δ = 1 − x∗ > 0 and x∗∗ = x∗ + δ/2. By construction, x∗∗ ∈
(−1, 1). Then, f (x∗∗ ) = x∗ + δ/2 > x∗ = f (x∗ ). This is a contradiction.
Next, suppose on the contrary that there is the minimum point x∗ ∈
(−1, 1). Define ε = x∗ + 1 and x∗∗ = x∗ − ε/2. By construction, x∗∗ ∈
(−1, 1). Then, we have that f (x∗∗ ) = x∗∗ − ε/2 < x∗ = f (x∗ ). This is a
contradiction. This completes the argument.

4 Homework 4 (Due Date: Sep 19 (Thu), 2024)

Question 4.1 (20 points) Decide where the following functions are convex
and determine possible inflection points:
1.
x
f (x) =
1 + x2
We compute the following:
′ 1 + x2 − x · 2x 1 − x2
f (x) = =
(1 + x2 )2 (1 + x2 )2
′′ −2x(1 + x2 )2 − (1 − x2 ) · 2(1 + x2 ) · 2x −2x(1 + x2 ) − 4x(1 − x2 )
f (x) = =
(1 + x2 )4 (1 + x2 )3
√ √
−2x(3 − x2 ) −2x( 3 + x)( 3 − x)
= 2 3
=
(1 + x ) (1 + x2 )3
Therefore, we obtain
 √ √
 > 0 if x > √ 3 or x ∈ (− 3,
√0)
′′
f (x) < 0 if x < − 3√or x ∈√(0, 3)
= 0 if x = 0, − 3, or 3

√ √ √ √
So, f is convex over [ 3, ∞) and [− 3, 0] and x = 0, − 3, 3 are the
inflection points.
2.
1−x
f (x) =
1+x
We first observe that f (x) is not well-defined at x = −1. So, we exclude
this point from the domain. We compute the following:
′ −(1 + x) − (1 − x) −2
f (x) = 2
=
(1 + x) (1 + x)2

′′ 2 · 2(1 + x) 4 > 0 if x > −1
f (x) = =
(1 + x)4 (1 + x)3 < 0 if x < −1

19
 Therefore, f is convex over (−1, ∞) and there are no inflection points.
3.
f (x) = xex
We compute the following:
′
f (x) = ex + xex = (x + 1)ex

 > 0 if x > −2
′′ x x x
f (x) = e + (x + 1)e = (x + 2)e < 0 if x < −2
= 0 if x = −2


So, f is convex over [−2, ∞) and x = −2 is the inflection point of f .

Question 4.2 Let

1 1
f (x) = ln(x + 1) − x + x2 − x3 .
2 6
Answer the following questions.

1. Find the domain of the function f .

We note that ln(x + 1) is well-defined if x > −1. So, the domain of f is

(−1, ∞).
2. Prove that for x in the domain,
′ x2 − x3
f (x) =
2(x + 1)
We simply compute the following:
′ 1 1 1
− 1 + x − x2 = 2 − 2(x + 1) + 2x(x + 1) − x2 (x + 1)

f (x) =
x+1 2 2(x + 1)
1 x2 − x3 x2 (1 − x)
−2x + 2x2 + 2x − x2 (x + 1) =

= = .
2(x + 1) 2(x + 1) 2(x + 1)

3. Find all possible extreme points and inflection points.

We compute the following:

′′ (2x − 3x2 ) · 2(x + 1) − (x2 − x3 ) · 2 −4x2 + 4x − 4x3
f (x) = =
4(x + 1)2 4(x + 1)2
 √  √ 
−x(x2 + x − 1) −x x + 1+2 5 x + 1−2 5
= =
(x + 1)2 (x + 1)2

20
 Therefore,
 √ √
 > 0 if x ∈ (0, (−1√ + 5)/2)) or x < √ −(1 + 5)/2
′′
f (x) < 0 if x > (−1 + 5)/2, √ x ∈ (−1 − √5)/2, −1), or x ∈ (−1, 0)
= 0 if x = 0, −(1 + 5)/2, or (−1 + 5)/2

√
Hence,
√ x = 0 and (−1 + 5)/2 are inflection points. Note that −(1 +
5)/2 < −1 so that this point is outside of the domain.
4. Check f (x) as x → (−1)+ and sketch the graph on the interval (−1, 2].

Define
1 1
g(x) = −x + x2 − x3 .
2 6
Then,
1 1 5
lim g(x) = 1 + + = .
x→(−1) + 2 6 3
Then, we can define f (x) = ln(x + 1) + g(x). Since limx→(−1)+ ln(x + 1) =
−∞ and −∞ + 5/3 = −∞, we conclude that limx→(−1)+ f (x) = −∞.
Question 4.3 (15 points) Let
   
0 1 −1 1 −1 5
A= and B = .
2 3 7 0 1 9
Evaluate A + B, A − B, and 5A − 3B.

 
1 0 4
A+B =
2 4 16
 
−1 2 −6
A−B =
2 2 −2
     
0 5 −5 3 −3 15 −3 8 −20
5A − 3B = − =
10 15 35 0 3 27 10 12 8
Question 4.4 Compute the products AB and BA, if possible, when A and B
are given as follows:
1.    
0 −2 −1 4
A= and B =
3 1 1 5
 
−2 −10
AB =
−2 17
 
12 6
BA =
15 3

21
 2.  
  2 −2
8 3 −2
A= and B =  4 3 
1 0 4
1 −5

 
26 3
AB =
6 −22
 
14 6 −12
BA =  35 12 4 
3 3 −22

3.  
  3 1
−1 0
A= and B =  −1 1 
2 4
0 2

AB is not well-defined.
 
−1 4
BA =  3 4 
4 8

4.  
0

A =  −2  and B = 0 −2 3
4

 
0 0 0
AB =  0 4 −6 
0 −8 12
BA = 16.

Question 4.5 (15 points) We say that a square matrix A is idempotent if

A2 = A. Show that the matrix
 
2 −2 −4
 −1 3 4 
1 −2 −3

is idempotent.

22
    
2 −2 −4 2 −2 −4 4 + 2 − 4 −4 − 6 + 8 −8 − 8 + 12
 −1 3 4   −1 3 4  =  −2 − 3 + 4 2 + 9 − 8 4 + 12 − 12 
1 −2 −3 1 −2 −3 2 + 2 − 3 −2 − 6 + 6 −4 − 8 + 9
 
2 −2 −4
=  −1 3 4 
1 −2 −3
Question 4.6 Consider the general 2 × 2 matrix
 
a b
A= .
c d
Answer the following questions.
1. Prove that A2 = (a + d)A − (ad − bc)I2 .
    2 
2 a b a b a + bc ab + bd
A = =
c d c d ac + cd bc + d2
   
(a + d)a (a + d)b ad − bc 0
(a + d)A − (ad − bc)I2 = −
(a + d)c (a + d)d 0 ad − bc
 2 
a + bc ab + bd
=
ac + cd bc + d2

2. Find an example of a 2 × 2 matrix A such that A2 = 0 but A ̸= 0.

From the previous result, one sufficient condition for this is to satisfy
a + d = 0, ad − bc = 0, and A ̸= 0. From a + d = 0, we have d = −a.
Plugging d = −a into ad − bc = 0, we obtain
−a2 − bc = 0.
We can satisfy this equality by setting a = 1, b = 1, and c = −1. So, the
desired matrix is  
1 1
.
−1 −1
Question 4.7 (15 points) An n × n matrix P is said to be orthogonal if
P T P = In . Answer the following questions.
√
1. For λ = ±1/ 2, show that the matrix
 
λ 0 λ
P =  λ 0 −λ 
0 1 0

23
 is orthogonal.
  
λ λ 0 λ 0 λ
′
P P =  0 0 1   λ 0 −λ 
λ −λ 0 0 1 0
 2 
2λ 0 0
=  0 1 0 .
0 0 2λ2
√
So, what we want is λ2 = 1/2, which is equivalent to λ = ±1/ 2.

2. Show that the 2 × 2 matrix

 
p −q
q p

is orthogonal if and only if p2 + q 2 = 1.

 ′     
p −q p −q p q p −q
=
q p q p −q p q p
   
p2 + q 2 −pq + pq p2 + q 2 0
= = .
−pq + pq q 2 + p2 0 p + q2
2

This is equivalent to the identity matrix when we set p2 + q 2 = 1.

Question 4.8 Use Cramer’s rule to solve the following system of equations.

1.

x1 − x2 = 0
x1 + 3x2 + 2x3 = 0
x1 + 2x2 + x3 = 0

First, we rewrite the system of equations:

    
1 −1 0 x1 0
 1 3 2   x2  =  0 .
1 2 1 x3 0

24
 By Cramer’s rule, we obtain

0 −1 0
0 3 2
0 2 1 0
x1 = = =0
1 −1 0 −2
1 3 2
1 2 1
1 0 0
1 0 2
1 0 1 0
x2 = = =0
1 −1 0 −2
1 3 2
1 2 1
1 −1 0
1 3 0
1 2 0 0
x3 = = = 0.
1 −1 0 −2
1 3 2
1 2 1

2.

x + 3y − 2z = 1
3x − 2y + 5z = 14
2x − 5y + 3z = 1

First, we write the system of equations:

    
1 3 −2 x 1
 3 −2 5   y  =  14  .
2 −5 3 z 1

25
 By Cramer’s rule, we obtain

1 3 −2
14 −2 5
1 −5 3 44
x = = =1
1 3 −2 44
3 −2 5
2 −5 3
1 1 −2
3 14 5
2 1 3 88
y = = =2
1 3 −2 44
3 −2 5
2 −5 3
1 3 1
3 −2 14
2 −5 1 132
z = = =3
1 3 −2 44
3 −2 5
2 −5 3

Question 4.9 (15 points) Define the matrix

 
1 t 0
At =  −2 −2 −1  ,
0 1 t

where t is a real number. Answer the following questions.

1. Calculate the determinant of At .

−2 −1 t 0
|At | = 1 · (−1)1+1 − 2 · (−1)2+1 = 2t2 − 2t + 1.
1 t 1 t

2. Confirm that |At | =

̸ 0.

We compute the following:

 2
2 1 1
|At | = 2t − 2t + 1 = 2 t − + > 0,
2 2
for any t.

26
 3. Show that for a certain value of t, one has A3t = I3 .
 
1 − 2t −t −t
A2t =  2 3 − 2t 2−t 
−2 −2 + t −1 + t2
  
1 t 0 1 − 2t −t −t
A3t =  −2 −2 −1   2 3 − 2t 2−t 
0 1 t −2 −2 + t −1 + t2
 
1 2t − 2t2 t − t2
=  4t − 4 5t − 4 −3 + 4t − t2 
2 − 2t 3 − 4t + t2 2 − 2t + t2

Therefore, we have A3t = I3 if and only if t = 1.

Question 4.10 Evaluate the determinant of each of the following matrices as

simply as possible:

1.  
3 0 1
A =  1 0 −1 
2 0 5
Since the second column consists of zeros, |A| = 0.

2.  
1 2 3 4
 0 −1 2 4 
B= 
 0 0 3 −1 
−3 −6 −9 −12
Since (−3, −6, −9, −12) = −3(1, 2, 3, 4), the first row and the fourth
columns are identical in B. This implies that |B| = 0.

3.  
a1 − x a2 a3 a4
 0 −x 0 0 
C= ,
 0 1 −x 0 
0 0 1 −x
where a1 , a2 , a3 , a4 and x are real numbers.

−x 0 0
1+1 −x 0
|C| = (a1 − x) · (−1) 1 −x 0 = (a1 − x) · (−x) · (−1)1+1
1 −x
0 1 −x
= −(a1 − x)x3 = x4 − a1 x3 .

27
Question 4.11 (15 points) For what values of x is the inner product of
(x, x − 1, 3) and (x, x, 3x) equal to 0?
(x, x − 1, 3) · (x, x, 3x) = x2 + x(x − 1) + 9x = 2x2 + 8x = 2x(x + 4) = 0.
So, x = 0 or x = −4 are the appropriate values.

Question 4.12 Let a = (1, 2, 1) and b = (−3, 0, −2). Answer the following
questions.

1. Find numbers x1 and x2 such that x1 a + x2 b = (5, 4, 4).

First, we compute the following:

x1 (1, 2, 1) + x2 (−3, 0, −2) = (x1 − 3x2 , 2x1 , x1 − 2x2 ).

So, if we choose (x1 , x2 ) = (2, −1), we obtain x1 a + x2 b = (5, 4, 4).

2. Prove that there are no real numbers x1 and x2 satisfying x1 a + x2 b =

(−3, 6, 1).

We have the following system of equations:

(1) x1 − 3x2 = −3
(2) 2x1 = 6
(3) x1 − 2x2 = 1.

From (2), we have x1 = 3. Plugging x1 = 3 into (3), we obtain x2 =

1. When (x1 , x2 ) = (3, 2), we obtain x1 − 3x2 = 3 − 3 = 0. This
contradicts (1). Therefore, there are no real numbers satisfying x1 a +
x2 b = (−3, 6, 1).

5 Homework 5 (Due Date: Sep 26 (Thu), 2024)

28