ECON 104: Mathematics for Economics

SMU School of Economics; Fall 2024

Answer Key to Practice Questions for the
Midterm Exam
Instructor: Takashi Kunimoto
September 20, 2024

1 Midterm Exam for G1 (80 minutes) in Fall

2023
This is the the past year midterm exam for G1.

Question 1.1 (Multivariate Calculus) Let

 α
x−y+z
f (x, y, z) =
x+y−z

be a multivariate function where α is a nonzero constant. Show that

∂f (x, y, z) ∂f (x, y, z) ∂f (x, y, z)

x +y +z = 0.
∂x ∂y ∂z

1
 We compute the following:
 α−1
∂f x−y+z 1(x + y − z) − (x − y + z) · 1
= α ·
∂x x+y−z (x + y − z)2
 α−1
2α(y − z) x−y+z
= 2
(x + y − z) x + y − z
 α−1
∂f x−y+z −(x + y − z) − (x − y + z) · 1
= α ·
∂y x+y−z (x + y − z)2
 α−1
−2αx x−y+z
= 2
(x + y − z) x + y − z
 α−1
∂f x−y+z (x + y − z) − (x − y + z) · (−1)
= α ·
∂z x+y−z (x + y − z)2
 α−1
2αx x−y+z
=
(x + y − z)2 x + y − z
Then, we obtain
∂f (x, y, z) ∂f (x, y, z) ∂f (x, y, z)
x +y +z
∂x ∂y ∂z
 α−1
2α x−y+z
= 2
[x(y − z) − xy + xz] = 0.
(x + y − z) x + y − z
This completes the argument.

Question 1.2 (Inverse Matrix) Consider the following system of linear equa-
tions:
x − y + 2z = 1
−x + 2y + z = 0
2x + y − z = 2.
Use the inverse matrix to solve this system of equations. You are required to
leave every step for deriving the inverse matrix.
Let us define  
1 −1 2
A =  −1 2 1 .
2 1 −1
Then, we can rewrite the system of equations in matrix form:
    
1 −1 2 x 1
 −1 2 1  y  =  0 
2 1 −1 z 2

2
We first compute the determinant of A:
2 1 −1 2 −1 2
|A| = 1(−1)1+1 − 1(−1)2+1 + 2(−1)3+1
1 −1 1 −1 2 1
= (−2 − 1) + (1 − 2) + 2(−1 − 4) = −14.
We next compute every cofactor of A:
2 1
A11 = (−1)1+1 = −2 − 1 = −3
1 −1
−1 1
A12 = (−1)1+2 = −(1 − 2) = 1
2 −1
−1 2
A13 = (−1)1+3 = (−1 − 4) = −5
2 1
−1 2
A21 = (−1)2+1 = −(1 − 2) = 1
1 −1
1 2
A22 = (−1)2+2 = (−1 − 4) = −5
2 −1
1 −1
A23 = (−1)2+3 = −(1 + 2) = −3
2 1
−1 2
A31 = (−1)3+1 = (−1 − 4) = −5
2 1
1 2
A32 = (−1)3+2 = −(1 + 2) = −3
−1 1
1 −1
A33 = (−1)3+3 = (2 − 1) = 1.
−1 2
So, we have
   
A11 A21 A31 3 −1 5
1 1 1 
A−1 = adj(A) = −  A12 A22 A32  = −1 5 3 .
|A| 14 14
A13 A23 A33 5 3 −1
Therefore, we obtain
          
x 1 3 −1 5 1 (3 + 10)/14 13/14
 y  = A−1  0  = 1  −1 5 3   0  =  (−1 + 6)/14  =  5/14  .
14
z 2 5 3 1 2 (5 − 2)/14 3/14
Question 1.3 (Single-Variable Optimization) Let a ≥ 0 be a nonnegative
constant and f be the following function:
1
f (x) = − x3 + 2x2 + (a − 5)x − 72.
3

3
Let D = {x ∈ R| x ≥ 0} be the set of nonnegative real numbers. We consider
the following optimization problem:

max f (x).
x∈D

Answer the following questions.

1. When a < 1, find the global maximum point of f over D.

′
First, we compute f (x):
′
f (x) = −x2 + 4x + (a − 5) = −(x − 2)2 − 4 + (a − 5) = −(x − 2)2 + a − 1.
′
If 0 ≤ a < 1, we have f (x) < 0 for any x ∈ D so that f is strictly
decreasing in x. Thus, x = 0 is the global maximum point of f over D.

2. When a > 5, find the global maximum point of f over D.

First, we check the first-order condition for f :

′
f (x) = −x2 + 4x + (a − 5) = 0 ⇔ x2 − 4x − (a − 5) = 0.

Solving this equation, we obtain

p √
x = 2 ± 4 + (a − 5) = 2 ± a − 1.
2
√
Since
√ we have −x + 4x + (a − 5) = −(x − (2 − a − 1))(x − (2 +
a − 1)) = 0, we characterize those intervals over which f is strictly
increasing, strictly decreasing, or constant.
 √

 < 0 if x < 2 − √a − 1
 = 0 if x = √ 2− a−1

√

′
f (x) > 0 if 2 − a −√1 < x < 2 + a − 1
= 0 if x = 2 + √a − 1




< 0 if x > 2 + a − 1


√ √
Since a√> 5, 2 − a − 1 < 2 − 5 − 1 = 0. This implies that f (0) <
√ a − 1). Therefore,√f achieves the global maximum value at x =
f (2 +
2 + a − 1. So, x = 2 + a − 1 is the global maximum point of f over
D when a > 5.

3. When 1 ≤ a ≤ 5, find the global maximum point(s) of f over D. (HINT:

Your answer will depend on the value of a.)

4
 √
When 1 ≤ a ≤ 5, we have 2− a − 1 ≥ 0. As we did in the previous ques-
tion, we characterize those intervals over which f is strictly increasing,
strictly decreasing, or constant:
 √

 < 0 if 0 ≤ x < 2
√ − a−1
 = 0 if x = √ 2− a−1

√

′
f (x) > 0 if 2 − a −√1 < x < 2 + a − 1
= 0 if x = 2 + √a − 1




< 0 if x > 2 + a − 1


Therefore, the
√ global maximum point of f over D must be either x = 0
or x = 2 + a − 1. We first compute
f (0) = −72.
We next compute
√
f (2 + a − 1)
1 √ √ √
= − (2 + a − 1)3 + 2(2 + a − 1)2 + (a − 5)(2 + a − 1) − 72
3
1 √ √ √
(2 + a − 1) −(2 + a − 1)2 + 6(2 + a − 1) + 3(a − 5) − 72

=
3
1 √  √ √
= (2 + a − 1) −4 − 4 a − 1 − a + 1 + 12 + 6 a − 1 + 3a − 15 − 72
3
1 √  √
= (2 + a − 1) −6 + 2a + 2 a − 1 − 72
3
2 √  √
= (2 + a − 1) −3 + a + a − 1 − 72.
3
This implies that
√ √
f (2 + a − 1) > f (0) ⇔ −3 + a + a − 1 > 0
√ √
f (2 + a − 1) = f (0) ⇔ −3 + a + a − 1 = 0
√ √
f (2 + a − 1) < f (0) ⇔ −3 + a + a − 1 < 0
This is equivalent to
√ √
f (2 + a − 1) > f (0) ⇔ a−1>3−a
√ √
f (2 + a − 1) = f (0) ⇔ a−1=3−a
√ √
f (2 + a − 1) < f (0) ⇔ a − 1 < 3 − a.
Finally, we conclude the following relationship:
√
f (2 + a − 1) > f (0) ⇔ a > 2
√
f (2 + a − 1) = f (0) ⇔ a = 2
√
f (2 + a − 1) < f (0) ⇔ a < 2.

5
 Therefore, the global maximum points of f over D in this case are
 √
 2 + √a − 1 if a > 2
0, 2 + a − 1 if a = 2
0 if a < 2


Question 1.4 (Matrix Algebra) Let A be given by the following matrix:

 
a b 0
A =  −b a b  ,
0 −b a

where a and b are arbitrary constants. Answer the following questions.

1. Find AA = A2 .
    2 
a b 0 a b 0 a − b2 2ab b2
A2 =  −b a b   −b a b  =  −2ab a2 − 2b2 2ab  .
2
0 −b a 0 −b a b −2ab a − b2
2

2. Under what conditions, does the matrix A defined above have the prop-
erty that A = −AT ?

We compute the following:

 
a −b 0
AT =  b a −b 
0 a a
 
−a b 0
−AT =  −b −a b 
0 −a −a

Therefore, A = −AT if a = 0.

3. Let B be a square matrix such that B = −B T . Show that if C is an arbi-

trary matrix such that C T BC is well-defined, then C T BC = −(C T BC)T .
You are required to explain every step for the derivation.

−(C T BC)T =
|{z} −(BC)T (C T )T
∵ (XY )T =Y T X T

=
|{z} −(BC)T C = −C T B T C = C T (−B T )C
∵ (C T )T =C

=
|{z} C T BC.
∵ B=−B T

6
4. Let D be any square matrix. Show that D1 = (D + DT )/2 is symmetric.

Let D be an n × n matrix such that the (i, j)-th element of D is denoted

by dij . Since DT is the transpose of D, we can denote the (i, j)-th
element of DT by dji . We denote the (i, j)-th element of D1 by d1ij . Since
D1 = (D + DT )/2, for each i, j = 1, . . . , n, we have
1 1
d1ij = (dij + dji ) = (dji + dij ) = d1ji .
2 2
Therefore, D1 is symmetric. Another way to show this is to compute the
following:
 T
T 1 1 T
D1 = D+ D
2 2
1 T 1

= D + D because (A + B)T = AT + B T , (αA)T = αAT , and (AT )T = A
2 2
1
DT + D


=
2
1
D + DT (because A + B = B + A)


=
2
= D1 ,
where A, B are n × n matrices and α ∈ R is a scaler.
5. Let D2 = (D − DT )/2, where D is any square matrix. Show that D2 =
−(D2 )T .

We denote the (i, j)-th element of D2 by d2ij . Since D2 = (D − DT )/2,

for each i, j = 1, . . . , n, we have
1 1
d2ij = (dij − dji ) = − (dji − dij ) = −d2ji .
2 2
Thus, D2 = −(D2 )T . Another way to show this to compute the following:
 T
T 1 1 T
−(D2 ) = − D− D
2 2
 
1 T 1
= − D − D
2 2


∵ (A − B) = AT − B T , (αA)T = αAT , and (AT )T = A
T

1
−DT + D


=
2
1
D − DT (∵ A + B = B + A)


=
2
= D2 ,

7
 where A, B are n × n matrices and α ∈ R is a scaler.

2 Midterm Exam for G2 (80 minutes) in Fall

2023
This is the the past year midterm exam for G2.

Question 2.1 (Multivariate Calculus) Find all first- and second-order par-
tial derivatives of f (x, y, z) = 3xyz + x2 y − xz 3 .
We first compute the first-order partial derivatives of f :
∂f
= 3yz + 2xy − z 3
∂x
∂f
= 3xz + x2
∂y
∂f
= 3xy − 3xz 2
∂z
We next compute the second-order derivatives of f :
∂ 2f
= 2y
∂x2
∂ 2f
= 0
∂y 2
∂ 2f
= −6xz
∂z 2
2
∂ f ∂ 2f
= = 3z + 2x
∂x∂y ∂y∂x
2
∂ f ∂ 2f
= = 3x
∂y∂z ∂z∂y
2
∂ f ∂ 2f
= = 3y − 3z 2 .
∂z∂x ∂x∂z
Question 2.2 (Inverse Matrix) Consider the following system of linear equa-
tions:
y − 2z = 2
−2x + z = 3
x − 2y = −1.
Use the inverse matrix to solve this system of equations. You are required to
leave every step for deriving the inverse matrix.

8
 Let us define  
0 1 −2
A =  −2 0 1 .
1 −2 0
Then, we can rewrite the system of equations in matrix form:
    
0 1 −2 x 2
 −2 0 1  y  =  3 
1 −2 0 z −1
We first compute the determinant of A:
1 −2 1 −2
|A| = −2(−1)2+1 + 1(−1)3+1
−2 0 0 1
= 2(0 − 4) + (1 − 0) = −7.
We next compute every cofactor of A:
0 1
A11 = (−1)1+1 =0+2=2
−2 0
−2 1
A12 = (−1)1+2 = −(0 − 1) = 1
1 0
−2 0
A13 = (−1)1+3 = (4 − 0) = 4
1 −2
1 −2
A21 = (−1)2+1 = −(0 − 4) = 4
−2 0
0 −2
A22 = (−1)2+2 = (0 + 2) = 2
1 0
0 1
A23 = (−1)2+3 = −(0 − 1) = 1
1 −2
1 −2
A31 = (−1)3+1 = (1 − 0) = 1
0 1
0 −2
A32 = (−1)3+2 = −(0 − 4) = 4
−2 1
0 1
A33 = (−1)3+3 = (0 + 2) = 2.
−2 0
So, we have
   
A11 A21 A31 2 4 1
1 1 −1 
A−1 = adj(A) = −  A12 A22 A32  = 1 2 4 .
|A| 14 7
A13 A23 A33 4 1 2

9
Therefore, we obtain
          
x 2 2 4 1 2 −(4 + 12 − 1)/7 −15/7
 y  = A−1  3  = −1  1 2 4   3  =  −(2 + 6 − 4)/7  =  −4/7  .
7
z −1 4 1 2 −1 −(8 + 3 − 2)/7 −9/7

Question 2.3 (Differentiating the System of Equations) The following

system of equations defines both u = u(x, y) and v = v(x, y) as continuously
differentiable functions of x and y around the point P where (x, y, u, v) =
(1, 1, 1, 1):

2uv + v 2 = 2x + y
u − v = x2 − y 2 .

Answer the following questions.

1. Find the differentials of u and v expressed in terms of the differentials of

x and y.

Define g1 (u, v, x, y) = 2uv + v 2 − 2x − y = 0 and g2 (u, v, x, y) = u − v −

x2 + y 2 = 0 as the implicit functions. First, we elaborate on dg1 = 0:
∂g1 ∂g1 ∂g1 ∂g1
dg1 = du + dv + dx + dy = 0
∂u ∂v ∂x ∂y
⇔ 2vdu + 2(u + v)dv − 2dx − dy = 0
⇔ 2vdu + 2(u + v)dv = 2dx + dy

Second, we elaborate on dg2 = 0:

∂g2 ∂g2 ∂g2 ∂g2
dg2 = du + dv + dx + dy = 0
∂u ∂v ∂x ∂y
⇔ du − dv − 2xdx + 2ydy = 0
⇔ du − dv = 2xdx − 2ydy

We summarize dg1 = 0 and dg2 = 0 in matrix form:

    
2v 2(u + v) du 2dx + dy
=
1 −1 dv 2xdx − 2ydy

2. Find ∂u/∂x and ∂v/∂x at P

We start from
    
2v 2(u + v) du 2dx + dy
= .
1 −1 dv 2xdx − 2ydy

10
 Setting dy = 0, we obtain
    
2v 2(u + v) du 2dx
=
1 −1 dv 2xdx
    
2v 2(u + v) ∂u/∂x 2
⇔ =
1 −1 ∂v/∂x 2x

At P = (1, 1, 1, 1), we have

    
2 4 ∂u/∂x 2
= .
1 −1 ∂v/∂x 2

Since
2 4
= −6 ̸= 0,
1 −1
this matrix has its inverse. Therefore,
   −1       
∂u/∂x 2 4 2 1 1 4 2 5/3
= = = .
∂v/∂x 1 −1 2 6 1 −2 2 −1/3

3. Find ∂u/∂y and ∂v/∂y at P .

We start from
    
2v 2(u + v) du 2dx + dy
= .
1 −1 dv 2xdx − 2ydy

Setting dx = 0, we obtain
    
2v 2(u + v) du dy
=
1 −1 dv −2ydy
    
2v 2(u + v) ∂u/∂y 1
⇔ = .
1 −1 ∂v/∂y −2y

At P = (1, 1, 1, 1), we have

    
2 4 ∂u/∂y 1
= .
1 −1 ∂v/∂y −2

As we did in the previous question, we obtain

   −1       
∂u/∂y 2 4 1 1 1 4 1 −7/6
= = = .
∂v/∂y 1 −1 −2 6 1 −2 −2 5/6

11
Question 2.4 (Single-Variable Optimization) Let a ∈ R be a positive con-
stant and f be the function given by
x
f (x) = .
(x2 − a)1/3

Answer the following questions. (HINT: Your answer will depend on the value
of a.)

1. Find the domain of the function f .

Since the denominator (x2 − a)1/3 needs to be nonzero, we must satisfy

x2 ̸= a. Therefore, the domain of f is defined as follows:
 √ √ √
D = x ∈ R| x ̸= ± a = (−∞, − a) ∪ (− a, a) ∪ (a, ∞).

2. Show that f (−x) = −f (x).

−x x
f (−x) = = − = f (x).
((−x)2 − a)1/3 |{z} (x2 − a)1/3
∵ (−x)2 =x2

3. Find all the intervals over which f is strictly increasing, strictly decreas-
ing, or constant.
′
We first compute f (x):

′ 1 · (x2 − a)1/3 − x · 31 (x2 − a)−2/3 · 2x

f (x) =
(x2 − a)2/3
2
(x2 − a)1/3 − 2x3 (x2 − a)−2/3
=
(x2 − a)2/3
2
x2 − a − 2x3
=
(x2 − a)4/3
x2 − 3a
=
3(x2 − a)4/3
√ √
(x + 3a)(x − 3a)
= .
3(x2 − a)4/3
′
Since we have (x2 − a)4/3 = ((x2 − a)2 )1/3 , the denominator in f (x) is

12
 always positive for any x defined over D. Therefore, we obtain
 √

 > 0 if x < −√3a


 = 0 if x √ = − 3a

 √
 < 0 if −√3a < x <√− a


′
f (x) < 0 if − a < √x < a
√
< 0 if a < √ 3a





 = 0 if x = 3a
 > 0 if x > √3a




4. Find possible local extreme points for f .

From the previous part of the √ question, we found two stationary points
of f over D. They are x = ± 3a. Since any point in D is an interior
point, by the necessity of local extreme points, any local extreme point
is a stationary point.
′′
Second, we compute f (x):
′′ 2x · 3(x2 − a)4/3 − (x2 − a)4(x2 − a)1/3 · 2x
f (x) =
9(x2 − a)8/3
2x(x2 − a)1/3 {3(x2 − a) − 4(x2 − 3a)}
=
9(x2 − a)8/3
−2x(x2 − 9a)
=
9(x2 − a)3
√ √
−2x(x + 3 a)(x − 3 a)
= .
9(x2 − a)3

Third, using the sign of the second derivative, we classify whether each
stationary point is a local maximum point or local minimum point for f
over D. We therefore compute the following:
√ √ √ √ √
′′ √ 2 3a(− 3a + 3 a)(− 3a − 3 a
f (− 3a) =
9(3a − a)3
√ √ √ √ √
−2 3a(3 3a − 3a)( 3a + 3 a)
=
72a3
< 0 √ √
√ √ √
′′ √ −2 3a( 3a + 3 a)( 3a − 3 a)
f ( 3a) =
9(3a − a)3
√ √ √ √ √
2 3a( 3a + 3 a)(3 a − 3a)
=
72a3
> 0.

13
 √ √
This implies that x = − 3a is a local maximum point and x = 3a is a
local minimum point for f .

5. Find possible inflection points for f .

′′
We check the sign of f (x) as follows:
 √

 > 0 if x < −3 √a
= 0 if x =√−3 a

√



< 0 if −3 a < x < − a



 √
 > 0 if − a < x < 0


′′
f (x) = 0 if x = 0 √
< 0 if √ 0 < x < a√




> 0 if a <√ x<3 a




= 0 if x = 3√a




< 0 if x > 3 a


√ √
Therefore, there are three inflection points for f over D: x = −3 a, 0, 3 a.

14