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Rahul Sir (Srcc Graduate , DSE Alumni)

CHAPTER -1
INTEGRATION

Evaluate the following integrals:

1. ∫(√𝑥 + √𝑥 + 1) 𝑑𝑥
𝟐 𝟑 𝟐 𝟑
[𝑨𝒏𝒔. : 𝒙𝟐 + (𝒙 + 𝟏)𝟐 + 𝒄]
𝟑 𝟑

2. ∫(√𝑥 + √𝑥 − 1) 𝑑𝑥
𝟐 𝟑 𝟐 𝟑
[𝑨𝒏𝒔. : 𝒙𝟐 + (𝒙 − 𝟏)𝟐 + 𝒄]
𝟑 𝟑
1
3. ∫ . 𝑑𝑥
√𝑥+1+√𝑥−1

𝟏 𝟑 𝟏 𝟑
[𝑨𝒏𝒔. : (𝒙 + 𝟏)𝟐 − (𝒙 − 𝟏)𝟐 + 𝒄]
𝟑 𝟑

4. ∫(𝑒 𝑎𝑙𝑜𝑔𝑥 + 𝑒 𝑥𝑙𝑜𝑔𝑎 ). 𝑑𝑥

𝒙𝒂−𝟏 𝒂𝒙
[𝑨𝒏𝒔. : + + 𝒄]
𝒂 + 𝟏 𝐥𝐨𝐠 𝒂

4𝑒 5𝑥 −9𝑒 4𝑥 −3
5. ∫ . 𝑑𝑥
𝑒 3𝑥

[𝑨𝒏𝒔. : 𝟐𝒆𝟐𝒙 − 𝟗𝒆𝒙 + 𝒆−𝟑𝒙 + 𝒄]

3𝑒 2𝑥 .(1+𝑒 2𝑥 )
6. ∫ . 𝑑𝑥
𝑒𝑥

[𝑨𝒏𝒔. : 𝟑𝒆𝒙 + 𝒆𝟑𝒙 + 𝒄]

𝑥3
7. ∫ 𝑥−1 . 𝑑𝑥

𝒙𝟑 𝒙 𝟐
[𝑨𝒏𝒔. : + + 𝒙 + 𝐥𝐨𝐠|𝐱 − 𝟏| + 𝐜]
𝟑 𝟐
1−𝑥
8. ∫ 1+𝑥 . 𝑑𝑥
[𝑨𝒏𝒔. : 𝟐𝒍𝒐𝒈|𝐱 + 𝟏| − 𝐱 + 𝐜]

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𝑥4
9. ∫ 𝑥+1 . 𝑑𝑥

𝒙𝟒 𝒙𝟑 𝒙 𝟐
[𝑨𝒏𝒔. : + + − 𝒙 + 𝐥𝐨𝐠|𝐱 + 𝟏| + 𝐜]
𝟒 𝟑 𝟐

Method of Substitution
2𝑥+9
10. ∫ 𝑥 2+9𝑥+10 . 𝑑𝑥

[𝑨𝒏𝒔. : 𝐥𝐨𝐠|𝐱 𝟐 + 𝟗𝐱 + 𝟏𝟎| + 𝐜]

6𝑥−8
11. ∫ 3𝑥 2 −8𝑥+5 . 𝑑𝑥 [𝑨𝒏𝒔. : 𝐥𝐨𝐠|𝟑𝐱 𝟐 − 𝟖𝐱 + 𝟓| + 𝐜]
𝑥5 𝟏
12. ∫ 1+𝑥 6 . 𝑑𝑥 [𝑨𝒏𝒔. : 𝐥𝐨𝐠|𝟏 + 𝐱 𝟔 | + 𝐜]
𝟔

𝑥 √𝟐𝒙𝟐 +𝟑
13. ∫ √2𝑥 2 . 𝑑𝑥 [𝑨𝒏𝒔. : + 𝒄]
+3 𝟐
1
14. ∫ . 𝑑𝑥 [𝑨𝒏𝒔. : 𝟐𝒍𝒐𝒈|𝟏 + √𝐱| + 𝐜]
√𝑥+𝑥

√2+log 𝑥
15. ∫ . 𝑑𝑥
𝑥
𝟐
[𝑨𝒏𝒔. : (𝟐 + 𝒍𝒐𝒈𝒙)𝟑/𝟐 + 𝐜]
𝟑

𝑒 −1/𝑥
16. ∫ . 𝑑𝑥
𝑥2

[𝑨𝒏𝒔. : 𝒆−𝟏/𝒙 + 𝐜]
2
17. ∫ 𝑒 𝑥 𝑥 . 𝑑𝑥
𝟏 𝟐
[𝑨𝒏𝒔. : 𝒆𝒙 + 𝐜]
𝟐
𝑒 𝑥 −𝑒 −𝑥
18. ∫ 𝑒 𝑥 +𝑒 −𝑥 . 𝑑𝑥
[𝑨𝒏𝒔. : 𝐥𝐨𝐠|𝐞𝐱 + 𝐞−𝐱 | + 𝐜]

𝑒 𝑥 −1
19. ∫ 𝑒 𝑥 +1 . 𝑑𝑥

[𝑨𝒏𝒔. : 𝐥𝐨𝐠|𝐞𝐱/𝟐 + 𝐞−𝐱/𝟐 | + 𝐜]

1
20. ∫ 1+𝑒 𝑥 . 𝑑𝑥
𝐞𝐱
[𝑨𝒏𝒔. : 𝐥𝐨𝐠 | | + 𝐜]
𝟏 + 𝐞𝐱

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21. ∫ 𝑥 . √𝑥 + 2. 𝑑𝑥
𝟓 𝟑
(𝒙 + 𝟐)𝟐 𝟐(𝒙 + 𝟐)𝟐
[𝑨𝒏𝒔. : 𝟐 { − } + 𝐜]
𝟓 𝟑

(3𝑥−1)
22. ∫ . 𝑑𝑥
√2𝑥+3

(𝟐𝒙 + 𝟑)𝟑/𝟐 𝟏𝟏(𝟐𝒙 + 𝟑)𝟏/𝟐

[𝑨𝒏𝒔. : − + 𝐜]
𝟐 𝟐

Integration by Parts

23. ∫ 𝑥. 𝑒 𝑥 . 𝑑𝑥
[𝑨𝒏𝒔. : 𝒆𝒙 . (𝒙 − 𝟏) + 𝐜]

24. ∫ 2𝑥. 𝑒 5𝑥 . 𝑑𝑥
𝟐𝒙. 𝒆𝟓𝒙 𝟐𝒆𝟓𝒙
[𝑨𝒏𝒔. : − + 𝐜]
𝟓 𝟐𝟓

25. ∫ 𝑙𝑜𝑔𝑥 . 𝑑𝑥
[𝑨𝒏𝒔. : 𝒙. (𝒍𝒐𝒈𝒙 − 𝟏) + 𝐜]

26. ∫ 𝑙𝑜𝑔𝑥 2 . 𝑑𝑥
[𝑨𝒏𝒔. : 𝟐𝒙. (𝒍𝒐𝒈𝒙 − 𝟏) + 𝐜]

27. ∫(𝑙𝑜𝑔𝑥)2 . 𝑑𝑥
[𝑨𝒏𝒔. : 𝒙. (𝒍𝒐𝒈𝒙 − 𝟏) + 𝐜]

28. ∫(1 − 𝑥 2 ) 𝑙𝑜𝑔𝑥. 𝑑𝑥

𝒙𝟐 𝐱𝟑
[𝑨𝒏𝒔. : 𝒙. (𝟏 + ) . 𝐥𝐨𝐠𝐱 − − 𝐱 + 𝐜]
𝟑 𝟗

29. ∫ 𝑒 𝑥 . (1 + 𝑥 ) log(𝑥𝑒 𝑥 ) . 𝑑𝑥
[𝑨𝒏𝒔. : 𝒙. 𝒆𝒙 . (𝐥𝐨𝐠(𝒙. 𝒆𝒙 ) − 𝟏 + 𝐜]

Integration by Partial Fractions

5𝑥
30. ∫ (𝑥+1).(𝑥 2 −4) . 𝑑𝑥

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𝟓
𝟓 𝐥𝐨𝐠|𝒙 − 𝟐| 𝟓
[𝑨𝒏𝒔. : 𝐥𝐨𝐠|𝒙 + 𝟏| + 𝟔 𝐥𝐨𝐠 |𝒙 + 𝟐| + 𝐜]
𝟑 𝟐

𝑥+3
31. ∫ 𝑥.(𝑥+2) . 𝑑𝑥

𝟑 𝟏
[𝑨𝒏𝒔. : 𝐥𝐨𝐠|𝒙| − 𝐥𝐨𝐠 |𝒙 + 𝟐| + 𝐜]
𝟐 𝟐
1−𝑥
32. ∫ 𝑥(1−2𝑥) . 𝑑𝑥

𝟏
[𝑨𝒏𝒔. : 𝐥𝐨𝐠|𝒙| − 𝐥𝐨𝐠 |𝟏 − 𝟐𝒙| + 𝐜]
𝟐
𝑥2
33. ∫ (𝑥−1).(𝑥−2) . 𝑑𝑥

[𝑨𝒏𝒔. : 𝒙 − 𝐥𝐨𝐠|𝒙 − 𝟏| + 𝟒𝒍𝒐𝒈 + 𝒙 − 𝟐| + 𝐜]

𝑥 3−𝑥−2
34. ∫ . 𝑑𝑥
1−𝑥 2

𝒙𝟐 𝟏+𝒙
[𝑨𝒏𝒔. : − 𝐥𝐨𝐠 | | + 𝐜]
𝟐 𝟏−𝒙
2𝑥
35. ∫ (𝑥 2+1).(𝑥 2+3) . 𝑑𝑥

𝟏 𝒙𝟐 + 𝟏
[𝑨𝒏𝒔. : 𝐥𝐨𝐠 | 𝟐 | + 𝐜]
𝟐 𝒙 +𝟑

2𝑥 2+𝑥+1
36. ∫ (𝑥−1)2 .(𝑥+2) . 𝑑𝑥

𝟏𝟏 𝟒 𝟕
[𝑨𝒏𝒔. : . 𝐥𝐨𝐠|𝒙 − 𝟏| − + 𝐥𝐨𝐠 |𝐱 + 𝟐| + 𝐜]
𝟗 𝟑(𝒙 − 𝟏) 𝟗

4𝑥 2 +5𝑥+3
37. ∫ (𝑥−1)2 .(𝑥+3) . 𝑑𝑥

𝟑 𝟓 𝟑
[𝑨𝒏𝒔. : . 𝐥𝐨𝐠|𝒙 + 𝟑| + . 𝐥𝐨𝐠 |𝐱 − 𝟏| − + 𝐜]
𝟐 𝟐 𝐱−𝟏
1
38. ∫ 𝑥(6(log 𝑥)2 +7𝑙𝑜𝑔𝑥+2) . 𝑑𝑥

𝟐𝒍𝒐𝒈𝒙 + 𝟏
[𝑨𝒏𝒔. : 𝐥𝐨𝐠 | | + 𝐜]
𝟑𝒍𝒐𝒈𝒙 + 𝟐

Definite Integrals

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2
39. ∫3 (2𝑥 − 𝑥 2 ). 𝑑𝑥
𝟒
[𝑨𝒏𝒔. : ]
𝟑
1
40. ∫−1(7𝑥 + 2). 𝑑𝑥
[𝑨𝒏𝒔. : 𝟒]
𝑒−1 1
41. ∫0 . 𝑑𝑥
𝑥+1

[𝑨𝒏𝒔. : 𝟏]
3
42. ∫1 (𝑥 + 2)2 . 𝑑𝑥
𝟗𝟖
[𝑨𝒏𝒔. : ]
𝟑
1
43. ∫−1(𝑒 𝑥 − 𝑒 −𝑥 ). 𝑑𝑥
[𝑨𝒏𝒔. : 𝟎]
3 1
44. ∫1 . 𝑑𝑥
2 𝑥2

𝟓
[𝑨𝒏𝒔. : ]
𝟑
2
45. ∫1 𝑒 3𝑥−1 . 𝑑𝑥
𝒆𝟐 𝟑
[𝑨𝒏𝒔. : (𝒆 − 𝟏)]
𝟑
1
46. ∫0 2𝑥 . 𝑑𝑥
𝟑
[𝑨𝒏𝒔. : ]
𝐥𝐨𝐠 𝟐

1 𝑥3
47. ∫0 . 𝑑𝑥
√1+𝑥 4

𝟏
[𝑨𝒏𝒔. : (√𝟐 − 𝟏)]
𝟐
1 2
48. ∫0 𝑥𝑒 −𝑥 . 𝑑𝑥
𝒆−𝟏
[𝑨𝒏𝒔. : ]
𝟐𝒆

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1 𝑥
49. ∫0 . 𝑑𝑥
√𝑥 2 +1

[𝑨𝒏𝒔. : √𝟐 − 𝟏]

LIBNIEZ FORMULA

1. Solve the below question using Libniez Formula

𝑑 𝑡 𝑑 3 𝑑 𝑡
a.𝑑𝑡 ∫0 x 2 dx b.𝑑𝑡 ∫𝑡 e  x 2 dx c.𝑑𝑡 ∫–𝑡 e  x 2 dx

𝑑 𝑡 𝑑 𝑡 1/3 𝑑 𝑡 1
d. ∫√𝑡 𝐼𝑛 𝑥 𝑑𝑥 e. ∫𝑡 1/6 x 6 dx f. ∫−𝑡 dx
𝑑𝑡 𝑑𝑡 𝑑𝑡
x4  1

𝟐 𝟐 𝒕−𝟏/𝟐 𝟏 𝟏 𝟐
[Ans ; a) 𝒕𝟐 , b)−𝒆−𝒕 ,c) 2𝒆−𝒕 , d) Int (1- ) ,e) 𝟑 𝒕𝟒/𝟑 -𝟔 𝒕𝟏/𝟔 ,f) ]
𝟒 √𝒕𝟒 +𝟏

AREA UNDER THE CURVE

Find The Area of region bounded of the below question

1. f(x)= 3x2 in [0, 2] [Ans 8] 2.f(x) = x6 in [0, 1] [Ans 1/7]

3. f(x)= ex in [-1, 1] [Ans e-1/e] 4.f(x) = 1/x2 in [1, 10] [Ans 9/10]

5. f(x)= x3 in [-1, 1] [Ans 1/2] 6. f(x) = 1/x in [-1, 10] [Ans does not exist]

7. Compute the area bounded by the graph of f (x) = 1/x3, the axis, and the lines x = -2 and
x = -1. [Ans 3/8]
1
8. Compute the area of A bounded by the graph of f(x) = 2(ex + e-x), the x-axis, and the
lines x = -1 and x = 1. [Ans e-1/e]

9. Find the area between the two parabolas defined by the equations y + 1 = (x − 1)2 and
3x = y 2 . [Ans :6]
1
10. Compute the area of bounded by the graph of f(x) = 2(ex - e-x), the x-axis, and the lines x
= -1 and x = 1. [Ans e-1/e]

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11. Find the area of the region bounded by y =2x-𝑥 2 and the x-axis using
integration? (4/3 sq units)

3𝑥 2
12. Find the area of the region included between the parabola y = and the line 3x-
4
2y+12=0? (27 sq units)

13. Find the area of the region included between the parabola 𝑦 2 = 4𝑎𝑥 and 𝑥 2 = 4𝑎𝑦
where a > 0? (16𝒂𝟐 /3 sq units)

14. Find the area of the region bounded by the curves y=𝑥 2 + 2, y=x,
x=0, x=3? (21/2 sq units)

15. Find the area of the region {(x, y): 𝑥 2 ≤ 𝑦 ≤ |𝑥 |} ? (1/3 sq units)

16. Find the area of the region bounded by the curves y=x and y=𝑥 3 ? (1/2 sq units)

17. Find the area of the region bounded by the lines 2y= -x+8 and the x-axis and the lines x
= 2 and x = 4? (5 sq units)

18. Find the area of the region bounded by the region x+2y=2, y-x=1,
2x+y=7? (6 sq units)

19. Using integration, find the area of the bounded region by the following curves:
y=1+|𝑥 + 1|, x= -3, x=3, y=0? (16 sq units)

20. Using integration, find the area of the bounded region by the following curves:
y=|𝑥 + 1|, x= -3, x=1, y=0? (4 sq units)

21. Using integration, find the area of the bounded common region of the circle 𝑥 2 + 𝑦 2 =
𝟒√𝟑 𝟏𝟔𝝅
16 𝑎𝑛𝑑 𝑡ℎ𝑒 𝑝𝑎𝑟𝑎𝑏𝑜𝑙𝑎 𝑥 2 = 6𝑦? ( + )sq units
𝟑 𝟑

22. Find the area of the bounded region by the curves:

Y=6x-𝑥 2 and y=𝑥 2 − 2𝑥? (64/3 sq units)

23. If the area enclosed between the curves y= a𝑥 2 𝑎𝑛𝑑 𝑥 = 𝑎𝑦 2 (a > 0) is 1 square unit,
𝟏
then find the value of a? (a= )
√𝟑

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24. Find the area bounded by the curve y=x|𝑥 |, x-axis and the ordinate x= -3 and
x=3? (18 sq units)

25. Use the method of integration find the area bounded by the curve |𝑥 | + |𝑦| =1

(2sq units)

APPLICATIONS OF INTEGRATION

To find Cost Function and Average Cost Function, given MC

1. The marginal cost of production is found is found to be MC = 2000 – 40x + 3x2, where x
is the number of units produced. The fixed cost of production is Rs. 18,000. Find the
total cost function and the average cost function.
𝟏𝟖𝟎𝟎𝟎
[𝑨𝒏𝒔. : 𝑪 = 𝟐𝟎𝟎𝟎𝒙 – 𝟐𝟎𝒙𝟐 + 𝒙𝟑 + 𝟏𝟖𝟎𝟎𝟎; 𝑨𝑪 = 𝟐𝟎𝟎𝟎 – 𝟐𝟎𝒙 + 𝒙𝟐 + ]
𝒙

2. The marginal cost function is given by MC = 2e0.001x. Find the total cost function if fixed
cost is Rs. 2,000.
[𝑨𝒏𝒔. : 𝑪 = 𝟐𝟎𝟎𝟎𝒆𝟎.𝟎𝟎𝟏𝒙 ]

3. The marginal cost of a product is given by MC = 2 + 3e x, where x is the number of units

produced. Find the total cost of production when x = 4, if the fixed cost is Rs. 200.
[𝑨𝒏𝒔. : 𝑪 = 𝟐𝟎𝟓 + 𝟑𝒆𝟒 ]

4. The marginal cost function of a firm is MC = 3 + 2logx. Find the total cost function when
the cost of production 1 units is Rs. 21.
[𝑨𝒏𝒔. : 𝑪 = 𝒙 + 𝟐𝒙𝒍𝒐𝒈𝒙 + 𝟐𝟎]

5. If the marginal cost function is given by MC = 2(2x + 9) -1/2 and the fixed cost is Rs. 4,
find the average cost for 8 units of output.
[𝑨𝒏𝒔. : 𝑹𝒆. 𝟏]

6. A factory manufacturing heavy machinery determined its marginal cost by the function
MC = 𝑥√𝑥 + 1 and the cost is Rs. 7800 when 3 machines are produced. Find the cost
function.
𝟐 𝟓 𝟐 𝟑 𝟏𝟏𝟔𝟖𝟖𝟖
[𝑨𝒏𝒔. : 𝑪 = (𝒙 + 𝟏)𝟐 − (𝒙 + 𝟏)𝟐 + ]
𝟓 𝟑 𝟏𝟓

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To find Total Revenue Function and Demand Function given MR

1. If the marginal revenue function for a commodity is MR = 9 – 4x2, find the demand
function.
𝟒
[𝑨𝒏𝒔. : 𝒑 = 𝟗 − 𝒙𝟐 ]
𝟑

2. If the marginal revenue function for a product is MR = 4 + e -0.03x, where x denotes

the number of units sold. Determine the total revenue from the sale of 100 units of
the product.
[𝑨𝒏𝒔. : 𝑹𝒔. 𝟒𝟑𝟏. 𝟕𝟎]
𝑥
𝑥
3. A firm’s marginal revenue function is 𝑀𝑅(𝑥) = 20𝑒 −10 (1 − 10). Find the

corresponding demand function.

[𝑨𝒏𝒔. : 𝒑 = 𝟐𝟎𝒆−𝒙/𝟏𝟎 ]
6
4. If the marginal revenue function for output x is given by 𝑀𝑅 = (𝑥+2)2 + 5, find the

total revenue function and the demand equation.

𝟑𝒙 𝟑
[𝑨𝒏𝒔. : 𝑹 = + 𝟓𝒙, 𝒑 = + 𝟓]
𝒙+𝟐 𝒙+𝟐
𝑎𝑏
5. If the marginal revenue function is − 𝐶, find the total revenue function and
(𝑥+𝑏)2
𝑎
show that 𝑝 = 𝑥+𝑏 − 𝑐 is the demand function (where p is price, x is quantity

demanded and a, b and c are constants).

𝒂𝒙
[𝑨𝒏𝒔. : 𝑹 = − 𝒄𝒙]
𝒙+𝒃
𝑎𝑏
6. A firm has the marginal revenue function given by 𝑀𝑅 = (𝑥+𝑏)2 − 𝑐, where is given
𝑎
by 𝑥 = 𝑝+𝑐 − 𝑏.
𝑎𝑏
7. Marginal revenue function of a firm is − 𝑐. Prove that the demand law is 𝑝 =
(𝑥−𝑏)2
𝑎
− 𝑐.
𝑏−𝑥

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Rahul Sir (Srcc Graduate , DSE Alumni)

To find Maximum Profit, given MR and MC

1. The marginal cost of production of a firm is Rs. (4 + 0.11x) and the marginal
revenue is Rs. 15. The overhead costs are Rs. 100. Find the maximum profit the firm
can earn and the level of production for this profit.
[𝑨𝒏𝒔. : 𝑹𝒔. 𝟒𝟓𝟎, 𝒙 = 𝟏𝟎𝟎]

2. The marginal cost (MC) and marginal revenue (MR) of a firm are given as MC = 4 +
0.08x and MR = 12, where x denotes the level of output. Compute the maximum
profit of the firm given that the initial fixed cost is Rs. 100.
[𝑨𝒏𝒔. : 𝑹𝒔. 𝟑𝟎𝟎, 𝒂𝒏𝒅 𝒙 = 𝟏𝟎𝟎]

3. The marginal cost of a product is given by MC = 3x + 4, where x is the number of

units produced. The fixed cost of production is Rs. 10. Find the cost function. If the
selling price is fixed at Rs. 40 per unit, find the revenue function and the maximum
profit.
[𝑨𝒏𝒔. : 𝑹 = 𝟒𝟎𝒙 & 𝑴𝒂𝒙 𝑷 = 𝑹𝒔. 𝟐𝟎𝟔]

4. The marginal revenue and the marginal cost for an output x of a commodity are
given as MR = 5 – 4x + 3x2 and MC = 3 + 2x. If the fixed cost is zero, find the profit
function and the profit when output is x = 4.
[𝑨𝒏𝒔. : 𝑷 = 𝟐𝒙 − 𝟑𝒙𝟐 + 𝒙𝟑 ; 𝟐𝟒]

5. The marginal cost of production is found to be C’(q) = 1000 – 20q + q2, where q is
the number of units produced. The fixed cost of production is Rs. 2,000. Find the
cost function. If the manufacture fixes the price per unit at Rs. 3,400, find the profit
function and sales volume that yields the maximum profit. Also obtain profit at this
sales volume.

𝟐
𝒒𝟑 𝟐
𝒒𝟑
𝑨𝒏𝒔. : 𝑪( 𝒙 ) = 𝟏𝟎𝟎𝟎𝒒 − 𝟏𝟎𝒒 + + 𝟐𝟎𝟎𝟎, 𝑷( 𝒒) = 𝟐𝟒𝟎𝟎𝒒 + 𝟏𝟎𝒒 − − 𝟐𝟎𝟎𝟎,]
[ 𝟑 𝟑
𝒒 = 𝟔𝟎 𝒂𝒏𝒅 𝒎𝒂𝒙𝒊𝒎𝒖𝒎 𝒑𝒓𝒐𝒇𝒊𝒕 = 𝑹𝒔. 𝟏, 𝟎𝟔, 𝟎𝟎𝟎

6. The XYZ Co. Ltd. has approximated the marginal revenue function for one of its
products by MR = 20x – 2x2. The marginal cost function is approximated by MC =
81 – 16x + x2. Determine the profit maximizing output and the total profit at the
optimal output, assuming fixed cost as zero.

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Rahul Sir (Srcc Graduate , DSE Alumni)

[𝑨𝒏𝒔. : 𝟗 𝒖𝒏𝒊𝒕𝒔, 𝑹𝒔. 𝟎]

7. A firm has following marginal revenue and marginal cost functions:

MR = 50 – 4x and MC = - 20 + 2x

The firm suffers a loss of Rs. 200 when no units are sold.

i) Determine total profit function.

ii) Find break-even points.
iii) Determine the profit enclosed between these two break-even points.
𝟏𝟎
[𝑨𝒏𝒔. : (𝒊)𝟕𝟎𝒙 − 𝟑𝒙𝟐 − 𝟐𝟎𝟎, (𝒊𝒊)𝟐𝟎 & , (𝒊𝒊𝒊)𝟎]
𝟑

To find Demand Function, given Price Elasticity of Demand

1. Deduce a demand relation which shows a constant price elasticity of demand
equal to ½.
[𝑨𝒏𝒔. : 𝒑𝒙𝟐 = ]

2. Obtain the demand function for a commodity for which price elasticity of
demand is ‘k’ throughout.
[𝑨𝒏𝒔. : 𝒙𝒑𝒌 = 𝒄]

3. The price elasticity of demand for a commodity is p/x. Find the demand function
if the demand is 3 when the price is 1.
[𝑨𝒏𝒔. : 𝒑 = 𝟒 − 𝒙]

4. Obtain the demand function for a commodity whose price elasticity of demand is
1
given by , where k is a constant.
𝑘𝑥

[𝑨𝒏𝒔. : 𝒑 = 𝒄𝒆−𝒌𝒙 ]
3p
5. The price elasticity of demand of a commodity is 𝐸𝑝 = (p−1)(p+2) find the

corresponding demand function if the quantity demanded is 8 units when the

price is Rs. 2.
𝟐(𝒑 + 𝟐)
[𝑨𝒏𝒔. : 𝒙 = ]
𝒑−𝟏

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6. The elasticity of demand of a commodity with respect to price is calculated to be

5𝑝
(𝑝+3)(𝑝−2)
(where p is the price). Find the demand function, if it is known that the

quantity demanded is 5 units at p = 3.

𝟓 𝒑+𝟑
[𝑨𝒏𝒔. : 𝒙 = ( )]
𝟔 𝒑−𝟐
5𝑝
7. The elasticity of demand of a commodity is given by (𝑝+2)(𝑝−3)
, where p is price.

Find the demand function, if quantity demanded is 5 at p = 3.

𝑘(𝑝 + 2)
[𝐴𝑛𝑠. : 𝑥 = , 𝑘 𝑏𝑒𝑖𝑛𝑔 𝑢𝑛𝑑𝑒𝑓𝑖𝑛𝑒𝑑]
𝑝−3

To find Consumption Function, given MPC

𝑑𝑆 1 1
1. The marginal propensity to save is given as = 4 + 6 𝐼, where S is savings and I
𝑑𝐼 √

is income. Find the total savings S if S = 12 when I = 25.

𝟏 𝟏 𝟒𝟗
[𝑨𝒏𝒔. : 𝑺 = 𝑰 + √𝑰 + ]
𝟒 𝟑 𝟏𝟐
𝑑𝐶 3 1
2. The marginal propensity to consume is given as = 4 − 2√3I, where consumption
𝑑𝐼

C is a function of national income I. Determine the consumption function if it is

known that consumption is 10 when I = 12.

𝟑 𝑰
[𝑨𝒏𝒔. : 𝑪 = 𝑰 − √ + 𝟑]
𝟒 𝟑

Income Distribution and Present & Future Discounted Value.

1. In the Population with incomes between a and b ,suppose the income distribution is
given by
𝑓 (𝑟) = 𝐵𝑟 −2.5 (B is positive)
𝒂−𝟎.𝟓 −𝒃−𝟎.𝟓
Determine the mean income of the group. [Ans 3 (𝒂−𝟏.𝟓 −𝒃−𝟏.𝟓 ) ]

2. Let the income distribution function be that of in question 1 , and let D(p ,r)
=A𝑝−1.5 𝑟 2.08 . compute total demand.
𝒏𝑨𝑩
[Ans 𝒑−𝟏.𝟓 (𝒃𝟎.𝟓𝟖 − 𝒂𝟎.𝟓𝟖 )
𝟎.𝟓𝟖

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3. Assume that the rate of extraction 𝑢(𝑡) from an oil well decreases exponentially
over time., with 𝑢(𝑡) = 𝑢̅𝑒 −𝑎𝑡 , where 𝑎 is a positive constant. Given the initial stock
𝑥(0) = 𝑥0 , find an expression 𝑥(𝑡) for the remaining amount of oil at time 𝑡. Under
what condition will the well never be exhausted. [Ans x(t) = 𝒙𝟎 -𝒖 ̅ (𝟏 − 𝒆−𝒂𝒕 )/a ,
̅ /a ]
𝒙𝟎 ≥ 𝒖

4. a) follow the pattern in question 1 and find the mean income 𝑚 over there interval
[𝑏, 2𝑏] when 𝑓 (𝑟) = 𝐵𝑟 −2 . [Ans : 2b In2 ]

b) Assume that the individual’s demand function is 𝐷(𝑝, 𝑟) = 𝐴𝑝 𝑦 𝑟 𝛿 , 𝐴 > 0, 𝛾 < 0, 𝛿 >
0, 𝛿 ≠1 Compute the total demand 𝑥(𝑝) ,assuming that there are 𝑛 individuals in the
population

𝟐𝜹−𝟏 −𝟏
[Ans :nAB𝒑𝒚 𝒃𝜹−𝟏 ]
𝜹−𝟏

5. Let 𝐾 (𝑡) denote the capital stock of an economy at time 𝑡. Then net investment at
time 𝑡, denoted by 𝐼(𝑡), is given by the rate of increase 𝐾(𝑡) of 𝐾(𝑡).

a) If 𝐼 (𝑡) = 3𝑡 2 + 2𝑡 + 5(𝑡 ≥ 0), what is the total increase in the capital stock during
the interval from 𝑡 = 0 to 𝑡 = 5? [Ans: 175 ]

b) If 𝐾 (𝑡0 ) = 𝐾0 , find an expression for the total increase in the capital stock from time
𝑡 = 𝑡0 to 𝑡 = 𝑇 when the investment function 𝐼(𝑡) is as in part (a)
[Ans (𝑻𝟑 − 𝒕𝟎 𝟑 ) + (𝑻𝟐 − 𝒕𝟎 𝟐 ) + 𝟓(𝑻 − 𝒕𝟎 ) ]

6. Find the present and future values of constant income stream of $500 per year over
the next 15 years, assuming an interest rate of 𝑟 = 6% = 0.06 annually,
compounded continuously.
[Ans 4945.25 , 12163.3 ]

7. a) find the present discounted value (PDV) of constant income stream of 𝑎 dollars
per year over the next 𝑇 years, assuming an interest rate of 𝑟 annually, compounded
continuously. [Ans : (a/r) (1-𝒆−𝒓𝑻 ) ]
b) what is the limit of PDV as 𝑇 → ∞? [Ans : a/r]

8. Find the present discounted value and future discounted value of a constant income
stream of rs 1000 per year over the next 10 years , assuming an interest rate of r
=8% compounded annually . [Ans 6883.9 , 15319.27 ]

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Rahul Sir (Srcc Graduate , DSE Alumni)

Intial Value problem , Mean Value theorem

1. Solve the following initial-value problems:

1 1 𝟏 𝟏
a) Find 𝐹(𝑥) if 𝐹 ′ (𝑥 ) = 2 − 2𝑥 and 𝐹 (0) = 2 [Ans : 𝟐 𝒙 − 𝒙𝟐 + 𝟐 ]

𝟏 𝟏 𝟏
b) Find 𝐹(𝑥) if 𝐹 ′ (𝑥 ) = 𝑥(1 − 𝑥 2 ) and 𝐹 (1) = 5/2 [Ans : 𝟐 𝒙𝟐 − 𝟐 𝒙𝟒 + 𝟔 ]

2. Find the general form of a function 𝑓 whose second derivative is 𝑥 2 . If we require in

𝟏
addition that 𝑓(0) = 1 and 𝑓 ′ (0) = −1, what is 𝑓(𝑥)? [Ans : 𝟏𝟐 𝒙𝟒 − 𝒙 + 𝟏]

3. a) Suppose that 𝑓 ′′ (𝑥 ) = 2 for all 𝑥, and 𝑓 (0) = 2, 𝑓 ′ (0) = 1. First find 𝑓′(𝑥) and
then 𝑓(𝑥).

[Ans: 𝒇′(𝒙)=2 𝒙+1 and f(𝒙) =𝒙𝟐 + 𝒙 + 𝟐 ]

1
b). Similarly, suppose that 𝑓 ′′ (𝑥 ) = 𝑥 2 + 𝑥 3 + 2 for 𝑥 > 0, and 𝑓 (1) = 0, 𝑓 ′ (1) = 1/4.
Find 𝑓(𝑥).

𝟏 𝟏
[Ans : 𝒇′(𝒙)= − 𝒙 + 𝟒 𝒙𝟒 + 𝟐𝒙 − 𝟏 , 𝐟(𝒙) = −𝐈𝐧𝒙 + (𝟏/𝟐𝟎) 𝒙𝟓 + 𝒙𝟐 − 𝒙 − 𝟏/𝟐𝟎 ]

4. A theory of investment has used a function W defined for all T>0 by

𝐾 𝑇
W(T) = 𝑇 ∫0 𝑒 −𝛿𝑡 𝑑𝑡 ( K and 𝛿 are postive constants)
Evalaute the integral , and prove that W(T) takes the values in the interval (0,K) and
is strictly Decreasing. [ Ans : k( 1- 𝒆−𝜹𝑻 )/ 𝜹𝑻 , prove part by yourself ]

5. i) Show that if f is continuous in [a,b] , then there exists a number 𝑥 ∗ ∈ [a,b] such
that
1 𝑏
𝑓(𝑥 ∗ ) =𝑏−𝑎 ∫𝑎 𝑓(𝑥) 𝑑𝑥

This is called the mean value theorem fot integral and 𝑓(𝑥 ∗ ) is called the mean
value of f in [a,b]
ii) Find the mean value of 𝑓(𝑥) =√𝑥 in [0,4] and illustrate ...

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CHAPTER -2
CONSTRAINT OPTIMIZATION

Solution of constraint optimization using Lagrange Multiplier Method(Two Variables)

1. Max 𝑧 = 5𝑥 2 + 6𝑦 2 − 𝑥𝑦 subject to g(𝑥, 𝑦) = 𝑥 + 2𝑦 = 4. [Ans:x=6, y=9]

2. Max z = 𝑥 + 𝑦 Subject to g(𝑥, 𝑦)= 𝑥 2 + 𝑦 =1. [Ans:x=1/2, y=3/4]

3. Min Z = 𝑥 2 + 𝑦 2 subject to g(𝑥, 𝑦) = 𝑥 + 2𝑦=4 [Ans:x=4/5, 8/5]

4. Max Z= 10𝑥 1/2 𝑦 1/3 subject to g(𝑥, 𝑦) = 2𝑥 + 4𝑦=9 [Ans:x=27/10, 9/10]

5. Max Z= xy subject to g(𝑥, 𝑦) = 2𝑥 + 𝑦=m [Ans:x=m/4, y=m/2]

𝛼 𝛽
6. Max Z= 𝑥 𝛼 𝑦 𝛽 subject to g(𝑥, 𝑦) = 𝑝𝑥 + 𝑦=9 [Ans:x= , y=𝛼+𝛽]
𝛼+𝛽

7. Max(min) Z =3xy subject to g(𝑥, 𝑦) = 𝑥 2 +𝑦 2 =8 [ Ans x= 2 , -2 ,y= 2 ,-2 ]

8. Max(min) Z= 𝑥 + 𝑦 subject to g(𝑥, 𝑦) = 𝑥 2 +3xy +3𝑦 2 =3 [Ans:x= 3 ,-3 , y=-1 ,1]

Solution of constraint optimization using Lagrange Multiplier Method(Two Variables) and

check for maxima and minima using Second order condition.

1. Max 𝑧 = 5𝑥 2 + 6𝑦 2 − 𝑥𝑦 subject to g(𝑥, 𝑦) = 𝑥 + 2𝑦 = 4. [Ans:Max at x=6, y=9]

2. Find the smallest distance between the origin and a point on the line
4𝑥 − 3𝑦 + 25 = 0 [Ans:Max at x=-4, y=3]

3. Use the Langrangeon method to find the extreme values of 𝑓(𝑥, 𝑦) = 𝑥 2 + 2𝑦 2 on the
circle 𝑥 2 + 𝑦 2 = 1. Verify Second order condition [Ans :Min at(1,0), (-1,0) ,λ=2
(Eco(H) 2017) Max at (0,1), (0,-1) , λ=1 ,Minvalue=1 , Max value=2]

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4. Find the maximum and minimum values that the function 𝑓 (𝑥, 𝑦) = 𝑥𝑦 takes on the
𝑥2 𝑦2
constraint + = 1. Verify Second order Condition
8 2

[Ans : Max at (2,1) (-2,-1) MaxValue=2 ]

5. 𝑓 (𝑥, 𝑦) = 5𝑥 − 3𝑦 subject to the constraint 𝑥 2 + 𝑦 2 = 136. Find the maximum and
minimum of 𝑓 (𝑥, 𝑦). Verify Second order Condition (Eco(H) 2011)
[Ans : Max at (-10,6) , Min at (10,-6) ]

Economic Applications

1. Given the utility function 𝑈 = (𝑥 + 2)(𝑦 + 1), and the budget constraint
2𝑥 + 5𝑦 = 51, Find the optimal levels of x and y purchased
by the consumer also check the second order condition. [Ans:Max at x=13, y=5 ]

2. A consumer enjoys two commodities x and y according to the utility function 𝑢 =

√𝑥 2 + 𝑦 2 . Find his utility if 𝑝𝑥 = 3 and 𝑝𝑦 = 4 and he has Rs. 50 to spend on the two
commodities. Also Verify the second order condition. [Ans:Max at x=6, y=5 ]

3. Find the associated demand functions of x and y from the utility function
1
𝑢 = 𝜌 (𝑥 𝜌 + 𝑦 𝜌 ), where 0 < 𝜌 < 1. Show that goods are substitute. Also verify second
𝑴𝒑𝜶 𝑴𝒑𝜶 𝟏
order conditions. [x= 𝒑𝜶+𝟏+𝒑𝒙𝜶+𝟏, y= 𝒑𝜶+𝟏 +𝒑𝒚𝜶+𝟏 , 𝒘𝒉𝒆𝒓𝒆 𝜶 = 𝝆−𝟏 ]
𝒙 𝒚 𝒙 𝒚
𝛽
4. If 𝑢 = 𝑥1𝛼 𝑥2 is the utility function of a consumer and 𝑀 = 𝑥1 𝑝1 + 𝑥2 𝑝2 is his budget
constraint, find demand functions of the two goods by Lagrange multiple methods.Using
𝜕𝑥 𝜕𝑥 𝜕𝑥 𝜕𝑥
these demand functions, find 𝑝1 𝜕𝑝1 + 𝑀. 𝜕𝑀1 𝑎𝑛𝑑 𝑝2 𝜕𝑝2 + 𝑀. 𝜕𝑀2 .
1 2
𝜶.𝑴 𝜷.𝑴
[𝑨𝒏𝒔: 𝒙𝟏 = (𝜶+𝜷)𝒑 , 𝒙𝟐 (𝜶+𝜷)𝒑 ]
𝟏 𝟐
Comment upon the degree of homogeneity. (Degree of homogeneity=0 )

5. An individual's utility function is given as 𝑈 = 𝑒 𝑥𝑦 where x and y denotes the

𝑴 𝑴
quantities of two commodities. Find demand functions of x and y. [Ans:x= 𝟐𝒑 , 𝒚 = ]
𝒙 𝟐𝒑𝒚

6. A consumer maximizes his utility function 𝑢 = 𝑥 𝛼 𝑦 𝛽 , subject to the budget constraint

2𝑥 + 3𝑦 = 12, 𝑎𝑡 𝑥 = 3 and 𝑦 = 2. Find the values of 𝛼 and 𝛽 if the utility function is
𝟏
known to be linearly homogenous. [𝑨𝒏𝒔: 𝜶 = 𝜷 = 𝟐]

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7. A consumer has the following utility function defined over

x and 𝑦: 𝑢(𝑥, 𝑦) = 𝑎 𝑙𝑜𝑔𝑥 + 𝑏 𝑙𝑜𝑔𝑦; 𝑎 + 𝑏 = 1. Find his demand schedules for x and y.
𝒂𝑴 𝒃𝑴
[Ans:x= 𝒚= ]
𝒑𝒙 𝒑𝒚

8. (a) A consumer is represented by a utility function 𝑢 = 3𝑥 2 𝑦 3 . Find his demand for the
commodities x and y if 𝑝𝑥 = 2, 𝑝𝑦 = 3 and his income = 15. [Ans: x = y = 3]

(b) Check whether the second order condition of utility maximization is satisfied.

9. Find the optimum commodity purchases for a consumer whose utility function is 𝑈 =
𝑓 (𝑥1 , 𝑥2 ) = 𝑥1 𝑥2 . Prices of 𝑥1 and 𝑥2 are Rs. 1 and Rs. 5 respectively and Income (𝑌) =
𝑅𝑠. 10. Use the second order conditions to verify that the solution is a constrained
maximum. [𝑨𝒏𝒔: 𝒙𝟏 =5, 𝒙𝟐 =1]

10. If 𝑢 = 𝑥1 𝑥2 + 2𝑥1 + 3𝑥2 is the utility functions of a consumer of two goods, I and II, and
𝑀 = 𝑥1 𝑝1 + 𝑥2 𝑝2 be his budget constraint,
(i) Derive the demand functions of the two goods by using the method of
𝑴+𝟐𝒑𝟏 𝟑 𝑴+𝟑𝒑𝟏
Lagrange Multiplier. [𝐀𝐧𝐬: 𝒙𝟏 = − 𝟐, 𝒙 𝟐 = -1]
𝟐𝒑𝟏 𝟐𝒑𝟐
(ii) Examine the second order condition for maxima of utility.
𝛿𝑥 𝛿𝑥 𝛿𝑥
(iii) Use these demand functions to find 𝑝1 𝛿𝑝1 + 𝑝2 𝛿𝑝1 + 𝑀 𝛿𝑀1 and
1 2
𝛿𝑥2 𝛿𝑥2 𝛿𝑥2
𝑝1 𝛿𝑝 + 𝑝2 𝛿𝑝 + 𝑀 𝛿𝑀 and interpret the results.
1 2

11. A monopolist has the following demand functions for each of his products X and Y: 𝑥 =
72 − 0.5𝑝𝑥 , 𝑦 = 120 − 𝑝𝑦 . The combined cost 𝐶 = 𝑥 2 + 𝑥𝑦 + 𝑦 2 + 35 and-the
maximum joint product is 40 units i.e. 𝑥 + 𝑦 = 40. Find
(i) The profit maximizing level of Output, [Ans:x=18, y=22]
(ii) The price of each product, and [𝐀𝐧𝐬: 𝒑𝒙 = 𝟏𝟎𝟖, 𝒑𝒚 = 𝟗𝟖]
(iii) The total profit. [𝑨𝒏𝒔: 𝝅 = 𝟐𝟖𝟔𝟏]

12. The production function of a firm is 𝑋 = 𝐾 1/2 𝐿1/2 and prices of capital and labour are
fixed at Rs. r and 𝜔 respectively,

(i) Find the cost minimizing combination of capital and labour.

𝒘 𝒓
(ii) Derive the demand functions of capital and labour. [Ans:K=√ 𝒓 𝑿, 𝑳 = √𝒘 𝑿]

(iii) Derive the cost function of the firm. [C=2√𝒘𝒓.X]

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13. Let the utility function be given by 𝑈 = 𝑥𝑦. The budget constraint is given as 100 −
𝑥𝑝𝑥 − 𝑦𝑝𝑦 = 0.

𝟓𝟎 𝟓𝟎
(i) Find the demand function for x and y. [(x= 𝒑 , 𝒚 = 𝒑 ]
𝒙 𝒚

(ii) Show that these functions are homogeneous of degree zero in absolute prices
and incomes.
(iii) Replace 𝑈 = 𝑥𝑦 with 𝑊 = (𝑥𝑦)2 and answer parts (i) and (ii) again.

14. Production function of a producer is given by 𝑋 = 12𝐿3/4 𝐾 1/4 , where X is output, L is

labour and K is capital. It is also known that price of labour is Rs. 3 per unit and the
price of capital is Re 1 per unit. Find the combinations of inputs that can maximize
output for a given cost of Rs 80. [Ans:K=L=20]
𝟏
Also find the cost function of the producer. [C= 𝟑 𝑿]

15. A firm produces output Y from inputs 𝑥1 and 𝑥2 according to the production
𝛽
function𝑌 = 𝐴𝑥1𝛼 𝑥2 . Derive an expression for the minimum cost of producing output Y
𝟏 𝜷 𝜶
𝒀 𝜶+𝜷 𝜶𝒘 𝜶+𝜷 𝜷𝒘 𝜶+𝜷
in terms of input prices (𝜔1 𝑎𝑛𝑑 𝜔2 ) and Y. [Ans: (𝑨) [𝒘𝟏 (𝜷𝒘𝟐 ) + 𝒘𝟐 (𝜶𝒘𝟏 ) ]
𝟏 𝟐

If the production function is linearly homogenous, show that the cost function is linear
𝒀 𝜶𝒘 𝜷 𝜷𝒘 𝜶
in output. [Ans: [𝒘𝟏 (𝜷𝒘𝟐 ) + 𝒘𝟐 (𝜶𝒘𝟏 ) ]
𝑨 𝟏 𝟐

16. A producer has the following production function 𝑋 = 𝐿1/2 + 𝐾 1/2 , where X, L and K
denote the quantities of output, labor and capital respectively.
(a) It is given that price of labor is Rs. 4 per unit and price of capital is Rs. 5 per unit.
(i) Determine the values of L and K for producing 45 units of output at
minimum cost. [Ans: L=625, K=400]
(ii) Find this minimum cost. [Ans:4500]
(iii) Verify the second order conditions.

(b) Assuming that the price of labor is 𝑝𝐿 per unit and price of capital is 𝑝𝐾 per unit,
find:
𝑿𝟐 𝒑𝟐𝒌 𝑿𝟐 𝒑𝟐𝒍
(i) The demand functions for labor and capital. [Ans:L= (𝒑 )𝟐
, 𝑲 = (𝒑 𝟐 ]
𝒌 +𝒑𝒍 𝒌 +𝒑𝒍 )
𝒑 𝒑
(ii) The cost function of the producer. [Ans:C=𝑿𝟐 (𝒑 𝒌+𝒑𝒍 )]
𝒌 𝒍

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(iii) The cost function when 𝑝𝐿 = 4 and 𝑝𝐾 = 5. [Ans:C=2.2𝑿𝟐 ]

17. Assume that the production function of a producer is given by 𝑋 = 10𝐿4/9 𝐾 5/9 , where X,
L and K denote output labor and capital respectively. If labor costs Rs. 5 per unit and
capital Rs. 4 per unit, find least-cost capital Labor ratio. [Ans: 25:16]

18. A producer has the production function 𝑋 = 10√𝐾𝐿, where X, K and L denote the
quantities of output, capital and labor respectively. If the price of labor is Rs. 10 per unit
and price of capital is Rs. 40 per unit:

(i) Determine the values of K and L for producing 200 units of output
at minimum cost, [Ans:K=10, L=40]

(ii) Calculate the cost. [Ans:800]

19. The production function of a firm is 𝑦 = 𝐴𝑥1𝑎 𝑥2𝑏 where 𝑥1 and 𝑥2 are two inputs with
prices 𝑤1 and 𝑤2 respectively,
𝒃𝒘
(i) Find the cost minimizing combination of the two inputs. [𝐀𝐧𝐬: 𝒙𝟐 = 𝒂𝒘𝟏 𝒙𝟏 ]
𝟐
(ii) Derive the demand functions of the two inputs
𝟏 𝒃 𝟏 𝒂
𝒚 𝒂+𝒃 𝒂𝒘 𝒂+𝒃 𝒚 𝒂+𝒃 𝒃𝒘 𝒂+𝒃
[𝑨𝒏𝒔: 𝒙𝟏 = (𝑨) × (𝒃𝒘𝟏 ) , 𝒙𝟐 = (𝑨) × (𝒂𝒘𝟏 ) ]
𝟐 𝟐
(iii) Derive an expression for the minimum cost of producing y.
𝟏 𝒃 𝒂
𝒚 𝒂+𝒃 𝒂𝒘 𝒂+𝒃 𝒃𝒘 𝒂+𝒃
[Ans:C=(𝑨) (𝒘𝟏 (𝒃𝒘𝟐 ) + 𝒘𝟐 (𝒂𝒘𝟏 ) )]
𝟏 𝟐

20. A Consumer spends an amount M to buy x units of one good at a price of 6 per unit and
y units of other good at a price of 10 per unit, m is positive. The consumer utility
function is 𝑈 (𝑥, 𝑦) = 𝑥𝑦 + 𝑦 2 + 2𝑥 + 2𝑦
Find the optimal quantities of x and y as function of m. what are the solution for
𝑥 ∗ , 𝑦 ∗ if 𝑚 ≤ 8. (Eco(H) 2010)

𝟐𝟎 − 𝒎 ∗ 𝒎 − 𝟖
{𝐀𝐧𝐬: 𝒙∗ = ,𝒚 = ; 𝑖𝑓 𝒎 ≤ 𝟖 𝒕𝒉𝒆𝒏 𝒙∗ ≥ 𝟏 𝒂𝒏𝒅 𝒚∗ ≤ 𝟎}
12 8

21. Suppose a monopolist is practicing price discrimination in the sale of a product. Let the
demand curves be 𝑝1 = 100 − 𝑥1 and 𝑝2 = 80 − 𝑥2 and the cost function is 𝐶 = 6𝑥
(where𝑥 = 𝑥1 + 𝑥2 ).
(i) How much should be sold in each market to maximize profit? What are the
prices charged? [Ans:(𝒙𝟏 = 𝟒𝟕, 𝒙𝟐 = 𝟑𝟕), (𝒑𝟏 = 𝟓𝟑, 𝒑𝟐 = 𝟒𝟑)]

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(ii) How much profit is lost if price discrimination is made illegal? [𝐀𝐧𝐬: ∆𝝅 =
𝟓𝟎]
(iii) If the monopolist is allowed to maintain a price difference of Rs. 4 only,
find 𝑥1 and 𝑥2 . [Ans:(𝟓𝟎, 𝟓𝟎) (34,46)]

22. Maximize the utility function 𝑈 = 𝑓(𝑥, 𝑦) = 𝑙𝑛𝑥 + 𝑦; subject to constraint

𝑥𝑝𝑥 + 𝑦𝑝𝑦 = 𝑚. Check the 2nd order condition. (Eco(H) 2014)
𝒑𝒚 𝒎 − 𝒑𝒚
{𝐀𝐧𝐬: 𝒙 = ;𝒚 = }
𝒑𝒙 𝒑𝒚

23. Maximize 𝑓 (𝑥, 𝑦) = 100𝑙𝑛𝑥 + 50𝑙𝑛𝑦, whenre 𝑥 > 0, 𝑦 > 0 subject to the constraint
𝟐𝟎 𝟏𝟎
3x + y = 10. {𝐀𝐧𝐬: 𝒙 = ,𝒚 = } (Eco(H) 2011, 2015)
𝟗 𝟑

24. A consumer Utility function for two goods is: 𝑈 (𝑥, 𝑦) = 𝑥 1/2 𝑦 1/2
Write down the necessary condition for the solution of the constraint optimization.
Problem for general values of 𝑝𝑥 , 𝑝𝑦 , 𝑚. Find the optimal values of x and y and the
corresponding values of 𝜆. Check the 2nd order condition and what are the consumer
demand functions for x and y? (Eco(H) 2012)
𝒎 𝒎 𝟏
{𝐀𝐧𝐬: 𝒙 = ,𝒚 = ,𝝀 = }
𝟐𝒑𝒙 𝟐𝒑𝒚 𝟐𝒑𝒚 𝟏/𝟐 𝒑𝒙 𝟏/𝟐

25. A consumer faces the following utility maximization problem.

Max. U(x, y) = 100 − 𝑒 −𝑥 − 𝑒 −𝑦 subject to px + qy = m, where 𝑥 > 0, 𝑦 > 0. Here, p
and q are per unit prices of goods x and y respectively, and m is the consumer’s
money income.

a) Find the necessary conditions for the solution of the problem and solve them for
the two demand functions x = f(p, q, m) and y = g(p, q, m) by using the
Lagrangean Method.
b) What happens to the optimal values of x and y if per unit prices of both goods
and consumer’s money income are doubled. (Eco(H) 2017)

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Enevlop Theorem.
1. A consumer's utility function for two goods is:
𝑈(𝑥, 𝑦) = 𝑥 1/2 𝑦 1/2 .Write down the necessary conditions for the solution of the
constrained optimization problem for general values of 𝑝𝑥 , 𝑝𝑦 and M. Find the
optimal values of x and y and the corresponding value of 𝜆. Check the second
order conditions. What are the consumer's demand functions for x and y? Find
𝜕𝑈∗
the indirect utility function 𝑈 ∗ ( 𝑝𝑥 , 𝑝𝑦 , 𝑀)and verify that 𝜆 = .
𝜕𝑀
𝒎 𝒎 𝟏
(Eco(H) 2014) . [𝐀𝐧𝐬: 𝒙 = 𝟐𝒑 , 𝒚 = 𝟐𝒑 , 𝝀 = 𝟏/𝟐 𝟏/𝟐 ]
𝒙 𝒚 𝟐𝒑𝒚 𝒑𝒙

2. 𝑥(𝑎, 𝑏) = 𝐴√𝑎𝑏 is a production function for good x using inputs a and b. Use the
Lagrangian method to find the amount of the factors required to produce an output
𝑥̅ at minimum cost, when prices of the inputs are 𝑝𝑎 & 𝑝𝑏 . Check the 2nd order
conditions and verify the envelope theorem. (Eco(H) 2018)

3. The consumer utility is a function of two goods x and y is given by:

𝑈 = 𝛼𝑙𝑛𝑥 + 𝛽𝑙𝑛𝑦 (𝑤ℎ𝑒𝑟𝑒 𝛼, 𝛽 𝑎𝑟𝑒 𝑝𝑜𝑠𝑖𝑡𝑖𝑣𝑒 𝑐𝑜𝑛𝑠𝑡𝑎𝑛𝑡𝑠)The consumer’s budget

constraint is given by 𝑝𝑥 + 𝑞𝑦 =
𝑚 (𝑤ℎ𝑒𝑟𝑒 𝑝 𝑎𝑛𝑑 𝑞 𝑎𝑟𝑒 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 𝑝𝑟𝑖𝑐𝑒𝑠 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑥 & 𝑦 𝑟𝑒𝑠𝑝𝑒𝑐𝑡𝑖𝑣𝑒𝑙𝑦 and m is money
income).

a) Using Langrangeon method, find the optimal values of x and y as functions of p, q

𝒎𝜶 𝒎𝜷
and m. (𝐀𝐧𝐬: 𝒙 = ,𝒚 = )
𝒑(𝜶+𝜷) 𝒒(𝜶+𝜷)
b) Check the second order condition.
𝜕𝑈 ∗
c) Find the optimal values of 𝑈 ∗ (𝑝, 𝑞 𝑎𝑛𝑑 𝑚). 𝐹𝑖𝑛𝑑 and give its economic
𝜕𝑚
interpretation. (Eco(H) 2016)
𝝏𝑼∗
( ) = 𝝀; 𝑼∗ 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆𝒔 𝒃𝒚 𝝀 𝒖𝒏𝒊𝒕𝒔 𝒘𝒊𝒕𝒉 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆𝒔 𝒊𝒏 𝒎
𝝏𝒎
𝝏𝑼∗
( ) = −𝝀𝒙; 𝑼∗ 𝒅𝒆𝒄𝒓𝒆𝒂𝒔𝒆𝒔 𝒃𝒚 𝝀𝒙 𝒖𝒏𝒊𝒕𝒔 𝒘𝒊𝒕𝒉 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆 𝒊𝒏 𝒑
𝝏𝒑
𝝏𝑼∗
( ) = −𝝀𝒚; 𝑼∗ 𝒅𝒆𝒄𝒓𝒆𝒂𝒔𝒆𝒔 𝒃𝒚 𝝀𝒚 𝒖𝒏𝒊𝒕𝒔 𝒘𝒊𝒕𝒉 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆 𝒊𝒏 𝒒
{ 𝝏𝒒 }

4. An individual purchases quantities 𝑋1 and 𝑋2 of two goods whose prices are 𝑝1 and
𝑝2 respectively. His utility functions is:
𝑈(𝑋1 , 𝑋2 ) = 𝑋1 + 𝐼𝑛 𝑋2

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Assuming his income is M, find the optimal quantities 𝑋1 and 𝑋2 . Also find the marginal
𝑴 𝒑 𝟏
utility of income. [ 𝐀𝐧𝐬: 𝑿𝟏 = − 𝟏, 𝑿𝟐 = 𝟏 & 𝜆 = ]
𝒑 𝟏 𝒑 𝒑 𝟐 𝟏

5. The production function of a firm is 𝑋 = 𝐾 1/2 𝐿1/4 and prices of capital and labour
are fixed at Rs. r and 𝜔 respectively
a) Find the cost minimising inputs of K and L , and also the minimum cost C , as
functions of r and 𝜔 and Q. Denotes the cost minimising values by K* , L* , C*.

[Ans: K* =𝟐𝟏/𝟑 𝒓−𝟏/𝟑 𝝎𝟏/𝟑 𝑸𝟒/𝟑 , 𝑳∗ = 𝟐−𝟐/𝟑 𝒓𝟐/𝟑 𝝎−𝟐/𝟑 𝑸𝟒/𝟑 , 𝑪∗ = 𝟑 . 𝟐−𝟐/𝟑 𝒓𝟐/𝟑 𝝎𝟏/𝟑 𝑸𝟒/𝟑 ]
𝝏𝑪∗ 𝝏𝑪 ∗ 𝝏𝑪∗ 𝝏𝑲∗ 𝝏𝑳∗
b) Verify that K* =( 𝝏𝒓 ) , L* =(𝝏𝜔 ) , 𝜆 = 𝝏𝑸 , = 𝝏𝒓
𝝏𝜔
Where 𝜆 denotes the Lagrange Multiplier.

6. Consider the problem max 10𝑥1/2 𝑦1/3 subjected to 2𝑥 + 4𝑦 = 𝑚

a) Write down the necessary conditions in this case, and solve then for 𝑥, 𝑦 and 𝜆 as
𝟏𝟎 𝟏/𝟔
function of 𝑚. [Ans : x=3m/10 , y= m/10 , 𝝀 = 𝟐. 𝟓( ) ]
𝟐𝟕𝒎
b) Verify Enevlop Theorem

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