Date Saved: January 24, 2018

Time Saved: 2:21 PM

Department of Economics
Final Exam – Answer Key
Fall 2017 - 2018
BMHT210 - Business and Managerial Math
Instructor : Enter Instructor Name
Section: Choose the Exam
Date: Wednesday, January 24, 2018 Section
Time: 14:00 - 16:00 Campus: Choose the Exam
Campus
Student Name:
Student ID:

Marking Scheme
Sections Weight Mark Sections Weight Mark
Problem 1 10 % Problem 6 12 %
Problem 2 12 % Problem 7 12 %
Problem 3 10 % Problem 8 12 %
Problem 4 10 % Problem 9 12 %
Problem 5 10 %

Final Grade (out of 100)

Instructions:
Do not take the staple out. This exam booklet contains [12] pages and must remain
intact.
No cell phones or any other form of data storage is permitted.
Any Attempt to cheat will result in an F grade.
Calculators are allowed.
Supplements are not allowed.
Closed Book Examination.

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 Date Saved: January 24, 2018
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Problem Solving: (100%)
Show all your work

Problem One: (10%)

Parts A and B are independent

Part A
Given the following geometric sequence:

𝑨: 𝟒, −𝟏𝟔, 𝟔𝟒, −𝟐𝟓𝟔, …

a. Find the common ratio 𝒓 . [2pts]

𝑇!
𝑟=
𝑇!
16
𝑟=− = −4
4

b. Determine the 6th term (𝑻𝟔 ). [3pts]

𝑇! = 𝑎𝑟 !!!
𝑇! = 4 −4 !!!
𝑇! = −4096

Part B
The third term of an arithmetic sequence B is 𝑻𝟑 = 𝟏𝟏 with a common difference 𝒅 = 𝟒 .

a. Determine the first term of the arithmetic sequence B (𝑻𝟏 ). [2pts]

𝑇! = 𝑎 + 𝑛 − 1 𝑑
𝑇! = 𝑎 + 3 − 1 (4)
11 = 𝑎 + 8

𝑎=3
Some students may do: 11 – 4 = 7, 7 – 4 = 3 (also acceptable)

b. Determine the sum of the first 10 terms (𝑺𝟏𝟎 ). [3pts]

𝑛
𝑆! = 2𝑎 + 𝑛 − 1 𝑑
2
10
𝑆!" = 2(3) + 10 − 1 (4)
2
𝑆!" = 210

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Problem Two: (12%)

Parts A and B are independent

Part A:
Caroline has saved an amount of $100,000 from her job. She decides to invest this money in a
bank for 5 years. She visits two banks: X and Y such as:

Bank X offers her simple interest of 5% per year; while

Bank Y offers her an interest rate of 5% compounded monthly.

a) How much would she have after 5 years (𝑷𝒕 =?) if she chooses Bank X? [3pts]

𝑃! = 𝑃! (1 + 𝑖𝑡)

𝑃! = 100,000 1 + 0.05 5

𝑃! = $125,000

b) How much would she have after 5 years (𝑷𝒕 =?) if she chooses Bank Y? [3pts]
!×!
𝑖
𝑃! = 𝑃! 1+
𝑚
!"×!
0.05
𝑃! = 100,000 1 +
12

𝑃! = $128,335.87

c) Which bank would you recommend to Caroline? [1pt]

I would recommend Bank Y because it gives her a higher return.

Part B:
John wants to buy a house for $250,000 in 7 years. He has saved $80,000 until now. Knowing
that the continuously compounded interest rate gives the greatest return, he is wondering what
interest rate (𝒊 =?) he should ask the bank for. [5pts]

𝑃! = 𝑃! 𝑒 !"

250,000 = 80,000𝑒 !×!

3.125 = 𝑒 !!

ln 3.125 = 7𝑖

ln 3.125
𝑖= = 0.1628 = 16.28%
7

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Problem Three: (10%)

Find the derivative of each of the following functions:

!
a) 𝑦 = 𝑥 ! + 7𝑥 ! − 5𝑥 + ! [2pts]

𝑦 = 𝑥 ! + 7𝑥 ! − 5𝑥 + 3𝑥 !!

𝑦 ! = 5𝑥 ! + 7 2𝑥 − 5 − 3𝑥 !!

3
𝑦 ! = 5𝑥 ! + 14𝑥 − 5 −
𝑥!

b) 𝑦 = ln 4𝑥 − 7 + 2 [2pts]

𝑦 = ln(𝑢) + 2

𝑢 = 4𝑥 − 7 𝑢! = 4
!
𝑢
𝑦! =
𝑢
4
𝑦! =
4𝑥 − 7

c) 𝑦 = 𝑒 !! ⋅ 𝑥 [3pts]

𝑦 = 𝑢. 𝑣
!
𝑢 = 𝑒 !! 𝑣 = 𝑥 = 𝑥!
1 !
𝑢′ = 4𝑒 !! 𝑣′ = 𝑥 !!
2
𝑦 ! = 𝑢! 𝑣 + 𝑢𝑣′
1 !
𝑦 ! = 4𝑒 !! 𝑥 + 𝑥 !! . 𝑒 !!
2
! !!
𝑒 !!
𝑦 = 4𝑒 𝑥+
2 𝑥

(! ! !!)
d) 𝑦 = !!
[3pts]

𝑢
𝑦=
𝑣
𝑢 = 𝑥! + 2 𝑣 = 𝑒!
𝑢′ = 2𝑥 𝑣′ = 𝑒 !
𝑢! 𝑣 − 𝑢𝑣 !
𝑦! =
𝑣!
! ! !
2𝑥𝑒 − 𝑒 𝑥 + 2
𝑦! = [satisfactory answer]
𝑒 !!
𝑒 ! 2𝑥 − 𝑥 ! − 2 −𝑥 ! + 2𝑥 − 2
𝑦! = =
𝑒 !! 𝑒!

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Problem Four: (10%)
𝟔𝟑
If the average cost function of a good is: 𝑨𝑪 = 𝟐𝑸 − 𝟏𝟎 + 𝑸
and the demand function is 𝑷 = 𝟐𝟎 − 𝑸

a) Find the expression of Total Cost, TC. [2pts]

𝑇𝐶 = 𝐴𝐶×𝑄
63
𝑇𝐶 = 2𝑄 − 10 + 𝑄
𝑄
𝑇𝐶 = 2𝑄! − 10𝑄 + 63

b) Find the expression of Marginal Cost, MC. [2pts]

𝑀𝐶 = 𝑇𝐶 !
𝑀𝐶 = 4𝑄 − 10

c) Find the expression of Total Revenue, TR. [2pts]

𝑇𝑅 = 𝑃×𝑄
𝑇𝑅 = 20 − 𝑄 𝑄
𝑇𝑅 = 20𝑄 − 𝑄!

d) Calculate the exact change in total revenue TR as output Q increases from 10 to 12.
[2pts]
∆𝑇𝑅 = 𝑇𝑅! − 𝑇𝑅!
∆𝑇𝑅 = 20 12 − 12 ! − 20 10 − 10 !
∆𝑇𝑅 = 96 − 100 = −4

e) Calculate the values of Q at the break even point. [2pts]

𝑇𝑅 = 𝑇𝐶
20𝑄 − 𝑄! = 2𝑄! − 10𝑄 + 63
−3𝑄! + 30𝑄 − 63 = 0
𝑄! = 3
𝑄! = 7

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Problem Five: (10%)

An electronics retailer company has the following Total Revenue (TR) and Total Cost (TC)
functions:
𝑻𝑹 = −𝟏𝟐𝑸𝟐 + 𝟏𝟔𝟎𝑸
𝑻𝑪 = 𝟏𝟔𝑸 + 𝟐𝟎

a. Write down the equation of the profit, 𝜋. [2pts]

𝜋 = 𝑇𝑅 − 𝑇𝐶
!
𝜋 = −12𝑄 + 160𝑄 − (16𝑄 + 20)
𝜋 = −12𝑄! + 160𝑄 − 16𝑄 − 20
𝜋 = −12𝑄! + 144𝑄 − 20

b. Find the equation of the marginal profit. [2pts]

𝑀𝜋 = 𝜋′
𝑀𝜋 = −24𝑄 + 144

c. Find the value of (Q) at the turning point. [2pts]

𝑀𝜋 = 𝜋 ! = 0
−24𝑄 + 144 = 0
24𝑄 = 144
𝑄!" = 6

d. Does the profit function have a maximum or a minimum? [2pts]

𝜋′′ = −24 < 0 ⟹ profit has a maximum at 𝑄 = 6

e. Find the value of the profit at the turning point. [2pts]

𝜋 = −12𝑄! + 144𝑄 − 20
𝜋 = −12 6 ! + 144 6 − 20
𝜋!"# = 412

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Problem Six: (12%)

Integrate each of the following functions:

a) 2𝑥 ! + 3𝑥 ! 𝑑𝑥 = [3pts]

𝑥! 𝑥!
2. + 3. + 𝑐 =
4 3
𝑥!
+ 𝑥! + 𝑐
2

!!! ! !! !
b) !!
𝑑𝑥 = [3pts]

1
−2𝑥 + 𝑑𝑥 =
𝑥
𝑥!
−2. + ln 𝑥 + 𝑐
2
−𝑥 ! + ln 𝑥 + 𝑐

c) 𝑒 !! + 𝑒 !! 𝑑𝑥 = [3pts]

1 !! 1 !!
𝑒 + 𝑒 +𝑐
3 4

d) (10𝑥 − 4)𝑑𝑥 = [3pts]

!
10𝑥 − 4 ! 𝑑𝑥 =
!
1 10𝑥 − 4 !
∙ +𝑐 =
10 3
2
1 !
∙ 10𝑥 − 4 ! +𝑐 = [satisfactory answer]
15
1 !
∙ 10𝑥 − 4 +𝑐
15

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Problem Seven: (12%)
Suppose you were given the demand and supply functions for batteries respectively as:
𝑷𝑫 = 𝟐𝟎𝟎 − 𝟓𝑸
𝑷𝑺 = 𝟓𝟎 + 𝑸
a) Draw the demand and supply curves. [3pts]

b) Calculate the equilibrium price and quantity. [3pts]

𝑃=𝑃
200 − 5𝑄 = 50 + 𝑄
6𝑄 = 150
𝑄! = 25

𝑃 = 200 − 5(25)
𝑃! = 75

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c) Calculate the consumer’s surplus using integration and shade its area on the graph in part
(a). [6pts]

!!!!
𝐶𝑆 = (𝑑𝑒𝑚𝑎𝑛𝑑 𝑓𝑢𝑛𝑐𝑡𝑖𝑜𝑛) 𝑑𝑄 − 𝑃! 𝑄!
!!!
!!!"
𝐶𝑆 = (200 − 5𝑄)𝑑𝑄 − (75)(25)
!!!
!"
𝑄!
𝐶𝑆 = 200𝑄 − 5 ⋅ − 1875
2 !
! !
𝐶𝑆 = 200 25 − 2.5 25 − 200 0 − 2.5 0 − 1875

𝐶𝑆 = 1562.5

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Problem Eight: (12%)
Consider the following matrices:

2 4
1 2 3 −3 −2 −1
𝐴= 𝐵= 𝐶 = 1 −3
4 5 6 1 2 3
0 1

𝐷 = 3×3 Identity (Unit) matrix 𝐸 = 2×2 Null matrix

a) Compute 2AT. [3pts]

1 4
!
𝐴 = 2 5
3 6
2 8
!
2𝐴 = 4 10
6 12

b) Calculate A + B. [3pts]

1 2 3 −3 −2 −1
𝐴+𝐵 = +
4 5 6 1 2 3
−2 0 2
𝐴+𝐵 =
5 7 9

c) Calculate 3D – 2E. [3pts]

1 0 0
0 0
3𝐷 − 2𝐸 = 3 0 1 0 − 2
0 0
0 0 1

3𝐷 − 2𝐸 = Impossible because they do not have the same dimensions

d) Calculate BC. [3pts]

2 4
−3 −2 −1
𝐵𝐶 = 1 −3
1 2 3
0 1

−3 2 − 2 1 − 1 0 −3 4 − 2 −3 − 1 1
𝐵𝐶 =
1 2 +2 1 +3 0 1 4 + 2 −3 + 3 1

−8 −19
𝐵𝐶 =
4 1

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Problem Nine: (12%)

A firm had figured its demand and supply equations as follows:

𝑷 = 𝟏𝟎𝟎 − 𝟖𝑸 and 𝑷 = −𝟑𝟎 + 𝟓𝑸

a) Rewrite the equations in the appropriate form (variables on one side and constants on the
other). [2pts]

𝑃 + 8𝑄 = 100

𝑃 − 5𝑄 = −30

b) Determine the equilibrium price and quantity using Cramer’s rule. [10pts]

1 8
Δ= = 1 −5 − 1 8 = −13
1 −5
100 8
Δ! = = 100 −5 − −30 8 = −260
−30 −5
1 100
Δ! = = 1 −30 − 1 100 = −130
1 −30
Δ! −260
𝑃= = = 20
Δ −13
Δ! −130
𝑄= = = 10
Δ −13

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