Question 4 (20 points): You are the owner of a bakery that sells two types of small cakes: strawberry

and chocolate. Making one batch of strawberry cakes takes 1 hour of employee A’s time, and 2
hours of employee B’s time. Making one batch of chocolate cakes takes 2 hours of employee A’s
time and 1 hour of employee B’s time. Employee A works 8 hours a day and employee B works only
7 hours a day. Every day, you need to produce at least 1 batch of strawberry cakes. You also have
enough chocolate to make at most 4 batches of chocolate cakes every day. One batch of strawberry
and chocolate cakes sells at $37 and $55, respectively. It costs $30 and $45 to make a batch of
strawberry and chocolate cakes, respectively. Your cakes are so good that all cakes can be sold.
Determine the number of batches of strawberry cakes, and the number of batches of chocolate
cakes produced per day to maximize daily profit.

To maximize daily profit, we need to determine the optimal number of batches of strawberry cakes
and chocolate cakes to produce.

Let's start by considering the time constraints.

“ Employee A can work for 8 hours a day, while employee B can work for 7 hours a day. Making one
batch of strawberry cakes takes 1 hour of employee A's time and 2 hours of employee B's time.
Making one batch of chocolate cakes takes 2 hours of employee A's time and 1 hour of employee B's
time. Since we need to produce at least 1 batch of strawberry cakes every day.”

Let's calculate the maximum number of batches of strawberry cakes we can make given the time
constraints.

Employee A can work for 8 hours, so the maximum number of batches of strawberry cakes that can
be made by employee A alone is 8 batches (8 hours / 1 hour per batch = 8 batches).

Employee B can work for 7 hours, so the maximum number of batches of strawberry cakes that can
be made by employee B alone is 3.5 batches (7 hours / 2 hours per batch = 3.5 batches).

To maximize the number of batches of strawberry cakes, we can assign: gán employee A to make 8
batches and employee B to make the remaining 1.5 batches. Therefore, we can produce a maximum
of 9.5 batches of strawberry cakes per day.

Now, let's consider the time constraints for making chocolate cakes. We have enough chocolate to
make at most 4 batches of chocolate cakes every day.

+ Employee A can work for 8 hours, so the maximum number of batches of chocolate cakes that can
be made by employee A alone is 4 batches (8 hours / 2 hours per batch = 4 batches).

+ Employee B can work for 7 hours, so the maximum number of batches of chocolate cakes that can
be made by employee B alone is 7 batches (7 hours / 1 hour per batch = 7 batches).

To maximize the number of batches of chocolate cakes, we can assign employee A to make 4 batches
and employee B to make the remaining 3 batches. Therefore, we can produce a maximum of 7
batches of chocolate cakes per day.

Now let's calculate the profit for each type of cake. One batch of strawberry cakes sells for $37 and
costs $30 to make, resulting in a profit of $7 per batch ($37 - $30 = $7). One batch of chocolate cakes
sells for $55 and costs $45 to make, resulting in a profit of $10 per batch ($55 - $45 = $10). To
determine the optimal number of batches for each type of cake, we need to compare the profit per
batch for each type.
For strawberry cakes, the profit per batch is $7. For chocolate cakes, the profit per batch is $10. Since
the profit per batch is higher for chocolate cakes, it is more profitable to produce more chocolate
cakes. Therefore, the optimal strategy is to produce 9.5 batches of strawberry cakes and 7 batches of
chocolate cakes per day to maximize daily profit.

Question 7 (10 points): Maricopa's Success scholarship fund receives a gift of $65,000. The money is
invested in stocks, bonds: trái phiếu, and saving deposits. Stocks pay 8.3% interest, bonds pay 5.1%
interest, and saving deposits pay 3.75% interest. Maricopa Success invests $15,000 less in bonds than
in saving deposits. If the annual income from the investments is $3550, how much was invested in
each account? Note: use matrix to solve this problem.

To use matrix to solve this problem, you need to write a system of linear equations that represents
the given information. Let x, y, and z be the amount of money invested in stocks, bonds, and saving
deposits, respectively. Then you can write the following equations:

 The total amount of money invested is $65,000: x+y+z=65,000

 The annual income from the investments is $3550: 0.083x+0.051y+0.0375z=3550
 Maricopa Success invests $15,000 less in bonds than in saving deposits: y=z−15,000

 To write these equations in matrix form, you need to arrange the coefficients of x , y , and z in a
matrix, and the constants in a vector. Then you can write:

[ ][ ] [ ]
1 1 1 x 65,000
0.083 0.051 0.0375 y = 3550
0 1 −1 z −15,000

 To solve for x , y , and z , you need to find the inverse of the coefficient matrix, and multiply both
sides by it. Then you can write:

[][ ][ ]
−1
x 1 1 1 65,000
y = 0.083 0.051 0.0375 3550
z 0 1 −1 −15,000

 To find the inverse of the coefficient matrix, you need to use the formula:

[ ] [ ]
−1
a b c ei−f h c h−bi bf −ce
1
d e f = fg−di ai−cg cd−af
det
g h i d h−eg bg−a h ae−bd

where det is the determinant of the matrix, given by:

det=aei+ bfg+ cdh−ceg−bdi−afh

 To multiply two matrices, you need to use the rule:

¿ , where n is the number of columns of A and the number of rows of B, and i and j are the row and
column indices of the product matrix, respectively.

Question 3 (20 points): a) The supply and demand functions of a good are given by:
𝑃 = 30 + 𝑄𝑠^2

𝑃 = 126 – 𝑄𝑑^2

where P, QS and Qd denote the price, quantity supplied and quantity demanded, respectively.
Calculate the producer’s and consumer’s surpluses at the equilibrium point.

b) An investment flow is 𝐼(𝑡) = 700√𝑡 where t is measured in years. Calculate the total capital
formation during the first three years.

Question 1 (10 points): A firm’s demand curve is described by P=40+2 A−2 Q where A is
expenditure on advertising, P is the price of its product and Q is the quantity demanded. Total costs
of production are given by TC=Q2 + AQ + A 2. What levels of output Q and advertising expenditure
A should the firms choose in order to maximize profit?
REVIEW FOR FINAL
Problem 1: Given the demand equation P=50−2 Q D and supply equation P=10+ 2Q S
a) Assuming pure competition, find the consumer surplus and producer surplus.
b) Suppose the government decides to impose a tax $5 per unit of good. Work out new PS and CS.
Determine the change in total surplus of whole economy.

Problem 2: A firm is allowed to charge different prices for its domestic and industrial
customers. If P1 and Q 1 denote the price and demand for the domestic market then the demand
equation is P1=20−2 Q1. If P2 and Q 2 denote the price and demand for the industrial market then
the demand equation is P2=15−1.5 Q 2. Total cost function is given by TC=5(Q 1 +Q 2 ). Find the
price of each market that the firm should charge to maximise profit.

Problem 3: An individual’s utility function is given: U =x1 × x 2 where x1 and x2 denote the number
of items of two goods, pizza and pasta, respectively. The prices of the goods are $10 and $2,
respectively. Assuming that the individual has $100 to spend on these goods. Find the number of
pizza or pasta dishes to maximize utility function.
Problem 4: During Covid-19 period, company A decides to launch two new products, hand-gel and
face mask. The cost of making each bottle is $16 and the cost for each face mask is $12. The
company recognizes that this is a risky venture so decides to limit the total weekly production costs
to $400. Also, due to a shortage of skilled labor, the total number of products that the company can
produce in a week is at most 30. In market, the selling price of each hand-gel bottle is $23 and $18
for each face mask.
a) How should the company arrange production to maximize profit?
b) Suppose the president of IU offers from company A to provide anti-infected items for students.
The school’s budget is $8024. They found that the quantity of face mask needs to be larger as twice
as that of the hand-gel bottle because of the frequency of usage. By using the matrix method, find
the number of each type that IU orders.

Problem 1: Your T-shirt operation is doing a booming trade. Last week you sold 50 tiedye shirts for
$15 each, 40 Suburban State University Crew shirts for $10 each, and 30 Lacrosse T-shirts for $12
each. Use matrix operations to calculate your total revenue for the week.

Problem 2: January sales at the A-Plus auto parts stores in Vancouver and Quebec are given in the

following table
The usual selling prices for these items are $7.00 each for wiper blades, $3.00 per bottle for cleaning
fluid, and $12.00 each for floor mats. The discount prices for A-Plus Club members are $6.00 each for
wiper blades, $2.00 per bottle for cleaning fluid, and $10.00 each for floor mats. Use matrix
multiplication to compute the total revenue at each store, assuming first that all items were sold at
the usual prices, and then that they were all sold at the discount prices.

Problem 3: The A-Plus auto parts store chain has two outlets, one in Vancouver and one in Quebec.
Among other things, it sells wiper blades, windshield cleaning fluid, and floor mats. The monthly
sales of these items at the two stores for two months are given in the following tables:

a) Use matrix arithmetic to calculate the change in sales of each product in each store from January
to February
b) The revenue generated by sales in the Vancouver and Quebec branches of the A-Plus in January
auto parts store was as follows:

Suppose that A 3 plus has run the same promotion program at two outlets with a 20% discount. Use
matrix arithmetic to calculate the revenue at each store after discount.