Scribd
Upload
8 views

Home Assignment 2 v1

need to solve tasks

Uploaded by

mr.furqatjon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
8 views

Home Assignment 2 v1

need to solve tasks

Uploaded by

mr.furqatjon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Mathematics for Economics and Finance, 2023/2024 Home Assignment #2 (due September 21nd, 2023)

Problem 1. Consider univariate function f : R → R where f (x) = 2x3 − 15x2 + 36x − 20 for every x ∈ R.
Then [4 points each]:

(a) Show that f (x) only has two critical points

(b) Assess whether each of those critical points is a local maximum or a global minimum

(c) Are those critical points local or global extrema?


(Hint: you can draw conclusions by checking what happens with f (x) as x tends to −∞ and ∞)

2
Problem 2. Consider now function u : R2 → R where u(x1 , x2 ) = f (x1 )e−x2 for every (x1 , x2 ) ∈ R2
(f (x1 ) being as defined in Problem 1). Then [4 points each]:

(a) Find the gradient of u(x1 , x2 )

(b) Use the gradient obtained in (a) to show that there are only two critical points
(Hint: find the values of x1 that solve for the first component of the gradient, and then plug these to
find x2 in the second component of the gradient)

(c) Find the Hessian matrix of u(x1 , x2 ) and evaluate it in each of the two critical points found in (b)

(d) Find the definiteness of the two matrices obtained in (c)

(e) Are the critical points found in (b) local maxima or local minima?

(f ) Are the critical points found in (e) local or global extrema?


(Hint: you can employ a similar criterion to that in part (c) of Problem 1)

Problem 3. Consider the following constrained maximization problem:

max ex1 +2x2


x1 ,x2 ∈R
s.t. x1 x2 ≤ 200

Let’s study how a (x∗1 , x∗2 , λ∗ ) satisfying the Karush-Kuhn-Tucker conditions would look like [4 points each]

(a) Write down the Lagrangian of the problem

(b) Write down the Karush-Kuhn-Tucker conditions of the problem

(c) Is it possible that λ∗ = 0? Then, what do we learn from the complementary slackness condition?
(Hint: could the optimality conditions hold if λ∗ = 0?)

(d) Use the two optimality conditions to obtain one equation without λ∗
(Hint: is it possible to simplify ex1 +2x2 ?)

(e) Use your answers in (c) and (d) to find the values of x∗1 , x∗2 and λ∗

(f ) Should you reasonably exclude any of the candidates found in (e)?


(Hint: looking at its impact on the objective function, think if it’s reasonable that x∗1 or x∗2 are
negative)
Mathematics for Economics and Finance, 2023/2024 Home Assignment #2 (due September 21nd, 2023)

Problem 4. Consider the following constrained minimization problem:

min 10x1 + 160x2


x1 ,x2 ∈R
1/3 2/3
s.t. x1 x2 ≥ 100

(a) Find the pairs (x∗1 , x∗2 ) that satisfy the Karush-Kuhn-Tucker conditions [20 points].
(b) Check the minimality criterion using the bordered Hessian [10 points].

Problem 5. Consider the following constrained maximization problem:

2
max f (x1 )e−x2
x1 ,x2 ∈R
s.t. g(x1 , x2 ) ≥ 0

where you can notice that the objective function is the same as in Problem 2. Then, suppose that (x∗1 , x∗2 , λ∗ )
is a solution to the problem and discuss briefly, with minimal calculations, whether you consider each of the
following to be true or false [10 points each]:

(a) If g(x1 , x2 ) = 1 − 2x1 , it is possible that λ∗ = 0

(b) If g(x1 , x2 ) = 2 − x1 , it is possible that λ∗ > 0

You might also like