MAT133Y1: Calculus and Linear Algebra for Commerce

Midterm Test: Model Solutions

December 8, 2022

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The sum of a finite geometric series is given by

n−1
X a(1 − rn )
ari = ,
i=0
1−r

provided r 6= 1.

Page: 2 3 4 6 7 8 Total
Points: 9 12 12 14 4 9 60
Score:

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For all multiple-choice questions in this test, please fully shade in the bubbles corresponding
to your answer(s) with dark ink or pencil. (unfilled filled )

1. (3 points)
R
Darlene’s local business is currently producing and selling 100 scrunchies
each day. The graph on the right shows their daily cost C and revenue
R as functions of the number q of scrunchies produced and sold each day, C
near q = 100. Complete the statements below by selecting the appropriate
words. q
90 95 100 105 110

positive positive
Darlene’s profit is negative and their marginal profit is negative .
zero zero
increase
In order to increase their profit, they should decrease their production and sales of scrunchies.
not change

2. (2 points) Let C(q) be the total cost for producing q fidget spinners. Which of the following best
describes the scenario where C 0 (q) > 0 and C 00 (q) < 0?
As we increase production, our total cost increases while our marginal costs decrease.
As we increase production, our total cost decreases while our marginal costs increase.
As we increase production, our marginal costs are increasing at slower and slower rates.
As we increase production, our marginal costs are decreasing at faster and faster rates.

3. (4 points) Graphed below are two functions f and g.

y y
6 6
5 y = f (x) 5 y = g(x)
4 4
3 3
2 2
1 1
0 x 0 x
0 1 2 3 4 5 6 0 1 2 3 4 5 6

Let h(x) = f (g(x)). Evaluate h0 (1) and explain your reasoning. (Please do not round.)

By the chain rule,

h0 (x) = f 0 (g(x))g 0 (x).
When x = 1, h0 (1) = f 0 (g(1))g 0 (1). On the graph of g, we see that g(1) = 4 and g 0 (1) = 2. Hence,

h0 (1) = f 0 (g(1))g 0 (1) = f 0 (4) · 2.

The slope of the graph of f at x = 4 is f 0 (4) = 3. Hence, h0 (1) = 6

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4. (12 points) Let s(t) represent the value of CanSolar stock in CAD at time t in weeks since the company
went public, where 0 ≤ t ≤ 6. The graph of the derivative y = s0 (t) is below.
y
10
y = s0 (t)
5

0
1 2 3 4 5 6
−5 t (weeks)

−10

(a) What should the units on the y-axis be? Please write your answer in the box: CAD/week

(b) List the appropriate values of t in each box. You are not required to include units or explain. List
numerical values only, in increasing order. You may state your answers as integers or round
to the nearest tenth. Write “NA” if there are no valid answers.

i. The local minimum(s) of the stock value function s(t) are at t = 1, 6 .

ii. The local maximum(s) of the stock value function s(t) are at t = 0, 5 .

iii. The inflection point(s) on the graph of s(t) are at t = 2, 3, 4 .

(c) Knowing the graph of s0 above, when are the best times for an investor to buy and sell CanSolar
stock? Fill in the blanks and then explain your answer below. If there are no good times to buy
or sell, you may write “NA”.

Answer: I recommend buying the stock 1 weeks after CanSolar went public

and selling the stock 5 weeks after CanSolar went public.

Explanation:

We would like to buy when the stock value is low, then sell when it is high. Ideally, we own
the stock only during times when the stock value is increasing. In this case, we notice that the
stock value first starts to increase at time t = 1 week after CanSolar went public, momentarily
levels off at time t = 3 weeks, then continues to increase until t = 5 weeks, at which point the
stock value starts to decrease. Outside of the time interval from 1 to 5 weeks, the stock value
is decreasing. Hence, I’d recommend buying at t = 1 and selling at t = 5.

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5. (12 points) A landscape architect plans to enclose a 400-square-metre rectangular region in a botanical
garden. She will use shrubs costing $18 per metre along three sides and fencing costing $7 per metre
along the fourth side. Due to supply restrictions, the fence can be no longer than 30 metres long. Find
the minimum total cost for completing this job.

• Sketch a picture of the rectangular region. • If you define a function, indicate its domain.
• Define your variables clearly. • Use full sentences to motivate and explain.

Our goal is to determine the minimum total cost for completing this landscaping job. Since the shrubbery
costs $18 per metre and the fencing costs $7 per metre, the total cost in dollars is

C = 7x + 18(x + 2y) = 25x + 36y,

where x is the length of the fence and y is the depth of the rectangular region, both measured in metres, as
shown in the diagram below.
x

We are told that the area of the rectangular region must be 400 square metres, hence,

xy = 400.
400
In other words, y = x . This constraint allows us to express the total cost C as a function of x only:

400
C = 25x + 36 · .
x
The domain of this function is 0 < x ≤ 30, because the fence must have positive length and supply
restrictions do not allow the fence to be more than 30 metres long.

To determine where the cost is minimized, we begin by finding the derivative of the cost as a function of x
searching for critical points of the cost function.

dC 400
= 25 − 36 · 2
dx x
q
36×400 6×20
The derivative is defined everywhere on the domain of C and is equal to zero when x = 25 = 5 = 24.

Note that when 0 < x < 24, the cost is a decreasing function of x because dC dx < 0. When 24 < x < 30,
dC
the cost is an increasing function of x because dx > 0. It follows that the cost function must be globally
minimized at x = 24.

400
Therefore, the minimum total cost is C = 25(24) + 36 · 24 = 1200 dollars.

Answer: The minimum total cost is $ 1200 .

If you need extra space for your work, you may use the next page.

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This is extra space for your work on Problem 5, if you need it.

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6. (14 points) Mia plans on buying a new $2000 computer every 5 years, starting today. She wants to
deposit enough money (as a lump sum payment) to a savings account today in order to ensure that she
can continue buying these computers for the rest of her life. The savings account collects interest at a
rate of 2.4% compounded annually.
(a) Find the present values of each of the first, second and third computers to be purchased. Show
your reasoning, then fill in the blanks below. Round to the nearest $0.01.

The present value of the first computer, purchased today, is $2000.

The second computer will be purchased in 5 years, so its present value is

$2000(1.024)−5 ≈ $1776.36.

Likewise, the present value of the third computer, to be purchased in 10 years, is

$2000(1.024)−10 ≈ $1577.72.

The present value of the first computer (purchased today) is $ 2000 .

The present value of the second computer (to be purchased in 5 years) is $ 1776.36 .

The present value of the third computer (to be purchased in 10 years) is $ 1577.72 .

(b) Assuming that Mia will live for another 53 years, how much money does she need to deposit into
her savings account today in order to fund all future computer purchases (one every five years)?
Please select the correct sum; there is no need to evaluate it.
53
X 50
X 10
X
2000(1.024)−i 2000(1.024)−i 2000(1.024)−5i
i=0 i=0 i=0
53
X 50
X 10
X
2000(1.024)i 2000(1.024)i 2000(1.024)5i
i=0 i=0 i=0

(c) To be both optimistic and prudent, let’s instead assume that Mia lives forever. In this case, how
much money should she deposit today in order to fund all future computer purchases (one every
five years)? Please show all of your reasoning. Round your answer to the nearest $0.01.

If Mia lives forever and continues to buy one computer every five years, she will buy infinitely
many computers. The present value of all her computer purchases is
∞ ∞
X
−5i
X
i 2000
2000(1.024) = 2000 1.024−5 = ≈ 17 885.64
1 − 1.024−5
i=0 i=0

Mia should deposit $ 17 885.64 today.

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 (d) After thinking about this more, Mia realises that inflation will actually cause the computer price
(for comparable models) to increase over time. The computer that she wants to buy costs $2000
today and she estimates that the price of this (or a comparable) model will increase by 3% each
year. Taking inflation into consideration, which of the following sums represents the amount of
money Mia would need to deposit in her account today to fund all future computer purchases (one
every five years)? Please select the correct sum; there is no need to evaluate it.
∞ ∞  i ∞  5i
X X 1 X 1.03
2000((1.03)(1.024))i 2000 2000
i=0 i=0
(1.03)(1.024) i=0
1.024
∞  i ∞ ∞  5i
X 1.03 X X 1
2000 2000((1.03)(1.024))5i 2000
i=0
1.024 i=0
(1.03)(1.024)
i=0

Note: Due to inflation, a computer purchased in k years will cost $2000(1.03)k . The present value
1.03 k
of this computer is $2000(1.03)k (1.024)−k = $2000 1.024


.
(e) Is it possible for Mia to deposit enough money into her account today to cover all future computer
purchases, after taking inflation into account? Yes. No. It’s impossible to say.

If yes, how much does she need to deposit? If no, briefly explain why not.

1.03 5
 
The present value is an infinite geometric series with multiplicative factor r = . Since
1.024
the inflation rate (3%) is greater than the interest rate (2.4%), we see that the factor r > 1.
This means that each term is greater than the previous one, so when we start adding them all
up, the sum approaches infinity! Therefore, if we account for inflation, we would require an
infinite lump sum today to fund all future computer purchases. In other words, it is definitely
not possible to fund all future computer purchases with a lump sum deposit today.
√
7. (4 points) Chester Cheetah runs in one direction along a straight path, with velocity v(t) = 12 t in
metres per second, where t is the time in seconds since they started running and 0 ≤ t ≤ 6.
7 r
X i 1
What does 12 · approximately represent?
4 4
i=0

velocity
This sum is approximately equal to the change in of the cheetah between times t = 0
position

and t = 2 seconds since they started running.

Illustrate your answer on the graph below.

1
∆t = 4

1 2 3 5 6 7 t
0 4 4 4
1 4 4 4
2 3 4 5 6

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8. (5 points) To control its depth, a submarine pumps water into a tank called the “ballast tank”. The
more water in its ballast tank, the deeper it can dive. Let V = f (t) be the volume of water (measured
in litres) in a submarine’s ballast tank t minutes after leaving the dock. The graph below represents the
rate of change of the volume of water in the tank during the first 8 minutes after leaving dock.
30
y = f 0 (t)
y (litres/minute)
20
10
0 t (minutes)
1 2 3 4 5 6 7 8
−10
−20
−30

(a) When did the submarine’s ballast tank contain the most water during this 8-minute period?
Answer: The ballast tank contained the most water 4.5 minutes after leaving the dock.
(b) When did the submarine’s ballast tank contain the least water during this 8-minute period?
Answer: The ballast tank contained the least water 0 minutes after leaving the dock.
(c) If the submarine’s ballast tank contains 400 L of water 4 minutes after leaving dock, how much
water will be in its ballast tank 8 minutes after leaving dock? Explain your reasoning.

By the Fundamental Theorem of Calculus, the volume of water in the tank 8 minutes after
leaving dock will be Z 8
f (8) = f (4) + f 0 (t) dt.
4
Recall that the integral above represents the signed area below the graph of y = f 0 (t) between
t = 4 and t = 8. This is shaded on the graph above; the blue area has a positive sign and the
red area has a negative sign. Adding them all up,
Z 8   
0 1 1
f (t) dt = (10 L/min × 1 min) − +3+1 = −40 L
4 2 2
Z 8
Hence, f (8) = f (4) + f 0 (t) dt = 400 L − 40 L = 360 L.
4

Answer: The tanks contain 360 litres of water 8 minutes after leaving dock.

9. (4 points) Evaluate the following integrals.

x4
Z
x3 + 2 dx =


(a) + 2x + C
4
Z 6 Z 3
(b) If you know that f (x) dx = 8, what is the value of f (2x) dx?
0 0

Let’s use the subsitution u = 2x. Then du = 2 dx and

Z 3 Z 6 Z 3
1 1
f (2x) dx = f (u) du = · 8 = 4. f (2x) dx = 4
0 2 0 2 0

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to clearly indicate in the original question that your solution is continued on Page 9.
Do not remove this page from the test booklet.

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This space is provided for additional space for your solutions if needed. If you must use this space, be sure
to clearly indicate in the original question that your solution is continued on Page 10.
Do not remove this page from the test booklet.

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