Final Revision

1 MATH FOR BUSINESS TA: VŨ THỊ THU TRANG
Chapter 5:
Partial Differentiation
I. Functions of several variables
1. First-order derivatives of functions of 2 variables
- Differentiate with respect to x holding z constant:
𝜕𝑦
= fx
∂x
- Differentiate with respect to z holding x constant:
𝜕𝑦
∂z
= fz
Example: Find expressions for the first-order partial derivatives for the
functions
a) f(x, y) = 5x4 – y2
𝜕𝑓
= 20x3 − 0 = 20x3
∂x
𝜕𝑓
= 0 − 2y = −2y
∂y
b) f(x, y) = x2y3 – 10x

𝜕𝑓
= 2xy3 – 10
∂x
𝜕𝑓
= 3x2y2 − 0 = 3x2y2
∂y
2. Second-order derivatives of a functions of 2 variables

- With y = f(x,z):
𝜕2 𝑦 𝜕2 𝑦
= fxx = fzz
∂𝑥 2 ∂𝑧 2
Contact: https://www.facebook.com/thutrang.vu308
Email: vuthithutrang2003@gmail.com
𝜕2 𝑦 𝜕2 𝑦
= fxz = fzx
∂𝑥 ∂z ∂𝑧 ∂x
Example:
(1) Find expressions for the second-order partial derivatives of the functions:
a) f(x,y) = 5x4– y2
fxx = 60x2
fyy = -2
fyx = fxy = 0
b) f(x,y) = x2y3– 10x
fxx = 2y3
fyy = 6x2y
fyx = fxy = 6xy2
(2) Find expressions for the partial derivatives f1, f11 and f21 in the case when
f(x1, x2, x3) = x1x2 + x15– x22x3

𝜕𝑓
f1 = = x2 + 5x14
∂x1
𝜕2 𝑓
f11 = = 20x13
∂𝑥12
𝜕2 𝑦
f21 = =1
∂𝑥2 ∂x1
3. Interpretation of partial derivatives
- If x and z change simultaneously, the small increments formula:
𝜕𝑦 𝜕𝑦
∆y ≈ ∆x + ∆z
∂x ∂z
Example: If z = xy – 5x + 2y, evaluate:

𝜕𝑧 𝜕𝑧
and at the point (2, 6).
∂x ∂y
a) Use the small increments formula to estimate the change in z as x

decreases from 2 to 1.9 and y increases from 6 to 6.1.
b) Confirm your estimate of part (a) by evaluating z at (2, 6) and (1.9, 6.1).
𝜕𝑧
=y−5
∂x
𝜕𝑧
=x+2
∂y
At (2, 6):
𝜕𝑧 𝜕𝑧
=1 =4
∂x ∂y
a) ∆x = −0.1, ∆y = 0.1
z ≅ 1(−0.1) + 4(0.1) = 0.3, so z increases by approximately 0.3.
b) At (2, 6), z = 14, and at (1.9, 6.1), z = 14.29, so the exact increase is 0.29
4. Implicit Differentiation
𝑑𝑦 𝑓𝑥
If f(x,y) = constant then =−
𝑑𝑥 𝑓𝑦
Example: Use implicit differentiation to find expressions for dy/dx given that
a) xy – y3 + y = 0
b) y5– xy2 = 10
𝑑𝑦 −𝑦
a) =
𝑑𝑥 x − 3y2 + 1
𝑑𝑦 𝑦2
b) =
𝑑𝑥 5y4 −2xy
II. Partial elasticity and marginal functions

Qd = f(P, PA, Y)
When Q: demand for a certain good
P: the good’s price
PA: the price of an alternative good
Y: the income of consumers.
1. Elasticity of demand:
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐷𝑒𝑚𝑎𝑛𝑑 𝑃 𝜕𝑄
EP = = x
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑃𝑟𝑖𝑐𝑒 𝑄 𝜕𝑃
Inelasticity: |E| <1

Elasticity: |E| >1
Unit elasticity: |E| =1
2. Cross price elasticity of demand:
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐷𝑒𝑚𝑎𝑛𝑑 𝑃𝐴 𝜕𝑄
EPA =
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑃𝑟𝑖𝑐𝑒 𝑜𝑓 𝐺𝑜𝑜𝑑 𝐴
=
𝑄
x 𝜕𝑃𝐴
+ Negative for complements
+ Positive for substitues
3. Income elasticity of demand:
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐷𝑒𝑚𝑎𝑛𝑑 𝑌 𝜕𝑄
EY = = x
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐼𝑛𝑐𝑜𝑚𝑒 𝑄 𝜕𝑌
+ Ey < 0 → inferior goods (white bread, instant noodle, bus transportation)

+ Ey > 0
• < 1: normal goods
• >1: superior goods (sport cars, quality wine, ...)
Example: Given the demand function:

Q = 500 – 3P – 2PA + 0.01Y
Where P = 20, PA = 30 and Y = 5000, find

(a) The price elasticity of demand.
(b) The cross-price elasticity of demand.
(c) The income elasticity of demand.
If income rises by 5%, calculate the corresponding percentage change in
demand. Would this good be classified as inferior, normal or superior?
---
Substituing the given values of P, PA and Y into the demand equation gives
Q = 500 – 3 x 20 – 2 x 30 + 0.01 x 5000 = 430
𝜕𝑄 20
a) = −3 so EP = x (−3) = −0.14
𝜕𝑃 430
𝜕𝑄 30
b) = −2 so EPA = x (−2) = −0.14
𝜕𝑃𝐴 430
𝜕𝑄 5000
c) = 0.01 so EY = x 0.01 = 0.12
𝜕𝑌 430
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐷𝑒𝑚𝑎𝑛𝑑
By definition, EY =
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐼𝑛𝑐𝑜𝑚𝑒
So the demand rises by 0.12 x 5 = 0.6%

The good is normal since 0 < 0.6 < 1
III. Utility
- Suppose there are two goods x1 and x2. The utility function relates the
quantities of these goods to the consumers levels of satisfaction using a utility
function:
U = f(x1, x2)
Example: If U(3,7)=20 and U(4,5)=25
=> The consumer derives greater satisfaction from buying 4 items of G1 and
5 items of G2 than from buying 3 items of G1 and 7 items of G2.
- Marginal utility associated with x1 (x2) gives the change in utility as a
result of a one unit change in the quantity of x1 (x2) consumed:
𝜕𝑈 𝜕𝑈
MU1 = MU2 =
∂x1 ∂x2
- When both x1 and x2 change simultaneously, we can use the small

increments formula to determine the overall change in utility:
𝜕𝑈 𝜕𝑈
∆U ≈ ∆x1 + ∆x2
∂x1 ∂x2
- We would expect the second derivative to be negative given the law of

diminishing marginal utility:
𝜕2 𝑈 𝜕2 𝑈
<0 and <0
∂𝑥12 ∂𝑥22
Example: An individual’s utility function is given by
U = 1000x1 + 450x2 + 5x1x2 – 2x12– x22
Where x1 is the amount of leisure measured in hours per week and x2 is

earned income measured in dollars per week. Determine the value of the
marginal utilities.
𝜕𝑈 𝜕𝑈
and
∂x1 ∂x2
When x1 = 138 and x2 = 500

Hence estimate the change in U if the individual works for an extra hour,
which increases earned income by $15 per week.
Does the law of diminishing marginal utility hold for this function?
---
𝜕𝑈
= 1000 + 5x2 − 4x1
∂x1
𝜕𝑈
= 450 + 5x1 − 2x2
∂x2
So at (138, 500):
𝜕𝑈 𝜕𝑈
= 2948 and = 140
∂x1 ∂x2
If working time increases by 1 hour then leisure time decreases by 1 hour, so
∆x1 = −1. Also ∆x2 = 15. By the small increments formula:
∆U = 2948 x (−1) + 140 x 15 = −848
The law of diminishing marginal utility holds for both x1 and x2 because
𝜕2 𝑈 𝜕2 𝑈
= −4 < 0 and = −2 < 0
∂𝑥12 ∂𝑥22
𝜕𝑈
𝑑𝑥2 𝜕𝑥1
- Slope/ gradient of the indifference curve: = − 𝜕𝑈 (negative)
𝑑𝑥1
𝜕𝑥2
- Marginal rate of commodity substitution (MRCS):
𝜕𝑈
𝑑𝑥2 𝜕𝑥1
MRCS= − = 𝜕𝑈
𝑑𝑥1
𝜕𝑥2
- The increase in x2 required to maintain the current level of utility when

x1 decreases by ∆x1 units:
∆x2 = MRCS x ∆x1
Example: Calculate the value of MRCS for the utility function given in the
above example at the point (138, 500). Hence estimate the increase in earned
income required to maintain the current level of utility if leisure time falls by
2 hours per week.
---
2948
MRCS = = 21.06
140
This represents the increase in x2 required to maintain the current level of
utility when x1 falls by 1 unit. Hence if x1 falls by 2 units, the increase in x2
is approximately
21.06 x 2 = 42.12
IV. Production Functions
Q = f(K,L)
The output (Q) depends on capital (K) and labour (L)
1. Marginal products: the first derivatives of the production function.
𝜕𝑄
MPK = (The marginal product of capital)
∂K
𝜕𝑄
MPL = (The marginal product of labour)
∂L
2. Returns to individual inputs: second-order derivatives.
𝜕2𝑄
∂𝐾 2
<0: Diminishing returns to capital.
>0: Increasing returns to capital.
=0: Constant returns to capital.
𝜕2𝑄
∂𝐿2
<0: Diminishing returns to labour.
>0: Increasing returns to labour.
=0: Constant returns to labout.
1. Small increment formula
𝜕𝑄 𝜕𝑄
∆Q ≈ ∆K + ∆L (isoquant)
∂K ∂L
2. Marginal rate of technical substitution (MRTS)
Marginal rate of technical substitution is the marginal product of labor divided by
the marginal product of capital
MPL
MRTS =
MPK
Example: Given the production function:
Q = K2 + 2L2
Write down expressions for the marginal products
𝜕𝑄 𝜕𝑄
and
∂K ∂L
Hence show that
2𝐿
a) MRTS =
𝐾
𝜕𝑄 𝜕𝑄
b) K +L = 2Q
∂K ∂L
---
a) MPK = 2K and MPL = 4L
MPL 4𝐿 2𝐿
MRTS = = =
MPK 2𝐾 𝐾
𝜕𝑄 𝜕𝑄
b) K +L = K(2K) + L(4L) = 2(K2 + 2L2) = 2Q
∂K ∂L
V. Optimisation problem
1. Unconstrained optimization
- Total differential:
𝜕𝑦 𝜕𝑦
dy = dx + dz
∂x ∂z
*Stationary points:
𝜕𝑦 𝜕𝑦
- First order conditions: dy = 0 => = 0 and =0
∂x ∂z
- Second order conditions:
𝜕2 𝑦 𝜕2 𝑦 𝜕2 𝑦
∇=( ) ( ∂𝑧 2 ) − ( ∂𝑥 ∂z )2
∂𝑥 2
- Minimum:
𝜕2 𝑦 𝜕2 𝑦
∂𝑥 2
>0, ( ∂𝑧 2 ) > 0 and ∇ > 0
- Maximum:
𝜕2 𝑦 𝜕2 𝑦
∂𝑥 2
<0 , ( ∂𝑧 2 ) < 0 and ∇ > 0
- Saddle point: ∇ < 0
Example: (1) Find and classify the stationary points of the function:
f(x, y) = x2 + 6y – 3y2 + 10
fx = 2x, fy = 6 – 6y, fxx = 2, fyy = - 6, fxy = 0
At a stationary point:
2x = 0
6 – 6y = 0
Which shows that there is just one stationary point at (0,1).

∇ = fxxfyy − fxy2 = 2 x (−6) − 0 = −12 < 0
So it is a saddle point.
(2) A firm is a monopolistic producer of two goods G1 and G2. The prices are
related
to quantities Q1 and Q2 according to the demand functions:
P1 = 50 – Q1
P2 = 95 – 3Q2
If the total cost function is
TC = Q12 + 3Q1Q2 +Q22
Show that the firm’s profit function is
π = 50Q1 − 2Q12 − 95Q2 − 4Q22 − 3Q1Q2
Hence find the values of Q1 and Q2 which maximise π and deduce the
corresponding prices.
2. Constrained optimization
2.1. The substitution method:
Optimise z = f(x,y) subject to 𝜑(x,y) = M
B1: Dùng phương trình 𝜑(x,y) = M để viết 1 phương trình mới y theo x (y = ax
+ b)
B2: Thay phương trình mới viết vào phương trình f(x,y) để được 1 phương trình
chứa 1 ẩn x
B3: Tìm f’(x), giải tìm x khi f’(x) = 0 ⟶ có x tìm được y
B4: Tìm f’’(x) <0 or >0 để xem là min hay max
Example:
2.2. The Lagrange multiplier

- Optimise y = f(x,z) subject to M = g(x,z).
- Step 1: Define a new function:
L = f(x, z) + λ(M − g(x, z))

- Step 2: Find all first order partial derivatives.
- Step 3: Solve the system of equations:
𝜕𝐿 𝜕𝐿 𝜕𝐿
= 0, = 0, =0
∂x ∂z ∂λ
- Step 4: Substitute values for x and z to find optimal value of y (if required).
Example:
Question:
*The ratio:
- The ratio of the input prices is equal to the ratio of their marginal products:
PL MPL
=
PK MPK
- The ratio of marginal product to price is the same for all inputs 𝑀𝑃𝐿= 𝑀𝑃𝐾:
MPL 𝑀𝑃𝐾
=
PL PK
- The ratio of the prices of the goods is equal to the ratio of their marginal
utilities:
P1 U1
=
P2 U2
- The ratio of marginal utility to price is the same for all goods consumed
𝑈1=𝑈2:
U1 U2
=
P1 P2
*Dạng bài: Maximise Utility hoặc max output (L,K) với Q= a𝐊 ∝ 𝐋𝜷 hoặc
U= a𝐱𝟏∝ 𝐱𝟐𝜷
Cách 1: Dùng Larange
PL MPL
Cách 2: Dùng ratio = (với PL là price of unit labor, PK là price of unit
PK MPK
P1 U1
capital) hoặc =
P2 U2
Example:
Cách 1: Q= 10K1/2 𝐿1/4 Subject to 4K+5L=60

G(K,L, λ)= 10K1/2 𝐿1/4 + λ(60 -5L -4K)
𝜕𝑔
= 5L1/4K-1/2 - 4λ= 0
∂K
𝜕𝑔 5
= K1/2L-3/4 - 5λ= 0
∂L 2
𝜕𝑔
= 60 - 4K- 5L = 0
∂λ
1/4 -1/2
=> 5L K = 4λ (2)
5 1/2 -3/4
2
K L = 5λ (3)
60 = 4K + 5L (4)
𝐿 4 𝐿 2 2𝐾
Divide equation (2) by (3) we have: 2 = => = => L=
𝐾 5 𝐾 5 5
2𝐾 2𝐾
Thế L = vào pt (4) 4K+5L=60 => 4K+ 5( ) = 60
5 5
=> K=10, => L=4

5 1/2 −3/4
PL MPL 5 2
𝐾 𝐿 5 1𝐾 𝐾 5 5𝐿
Cách 2: PK = MPK
=> =
4 1/4 −1/2 => =
4 2 𝐿
= =>
𝐿
= => K=
2 2
5𝐿 𝐾
5𝐿 5𝐿
Thế K= vào pt 4K+5L=60 => 5L+ 4( ) = 60
2 2
=> K=10, => L=4
Chapter 6:
Integration
1. Rules For Integration
1
∫ xn. dx = xn+1 + c
𝑛+1
∫ af(x)dx = a ∫ f(x)dx
1
∫ dx =𝑙𝑛𝑥 + c
𝑥
1 mx
∫ emx dx = .e + c
𝑚
∫[f(x) ± g(x)]dx = ∫ f(x)dx ± ∫ g(x)dx
2. Application I: Revenue, Costs And Profit

- Marginal product of labour, capital (MPL; MPK)
Q= ∫MPL dL
Q= ∫MPK dK
- Given MR and MC, use integration to find TR and TC:
TR(Q) = ∫MR(Q) dQ
TC(Q) = ∫MC(Q) dQ
∫ f(x) = F(x) + c
+ MC → TC: c = Fixed cost
+ Còn lại: c = 0
Example:
(a) A firm’s marginal cost function is
MC = 2
Find an expression for the total cost function if the fixed costs are 500. Hence find
the total
cost of producing 40 goods.
(b) The marginal revenue function of a monopolistic producer is
MR = 100 – 6Q
Find the total revenue function and deduce the corresponding demand function.
---
(a)
TC = ∫ 2dQ = 2Q + c
Fixed costs are 500, so c = 500. Hence
TC = 2Q + 500
Put Q = 40 to get TC = 580
(b)
TR = ∫(100 − 6Q)dQ = 100Q − 3Q2 + c
Revenue is zero when Q = 0, so c = 0. Hence
TR = 100Q − 3Q2
𝑇𝑅 100𝑄−3𝑄2
P= = = 100Q − 3Q
𝑄 𝑄
So demand equation is P = 100 − 3Q

3. Definite Integration
𝑏
∫𝑎 𝑓(𝑥)dx = [F(x)]|ba = F(b) − F(a)
4.Application Ii: Consumer And Producer Surplus
- Consumer surplus: amount consumers are willing to pay for a good in excess
of actual price charged
𝑸𝟏
CS = ∫𝟎 𝐃(𝐐)𝐝𝐐 − 𝐏𝟏𝐐𝟏
- Producer surplus: amount in below actual price charged that produces are willing to
aplly the good
𝑸𝟏
PS = 𝐏𝟏𝐐𝟏 − ∫𝟎 𝐒(𝐐)𝐝𝐐
Example: Given the demand equation P = 50 − 2QD and supply equation P = 10 +

2QS. Calculate
(a) the consumer’s surplus
(b) the producer’s surplus
Assuming pure competition.
---
In equilibrium, QS = QD = Q, so
P = 50 – 2Q
P = 10 + 2Q
Hence,
50 – 2Q = 10 + 2Q
Which has solution Q = 10. The demand equation gives
P = 50 – 2 x 10 = 30
10
(a) CS = ∫0 (50 − 2Q)dQ − 10 x 30 = 100
10
(b) PS = 10 x 30 − ∫0 (10 + 2Q)dQ = 100
5. Application III: Investment Flow

- Net investment, I, is defined to be the rate of change of capital stock, K, so that
where
𝑑𝐾
I=
𝑑𝑡
I (t) denotes the flow of money, measured in dollars per year.
K (t) is the amount of capital accumulated at time t as a result of this investment flow
and is measured in dollars.
➔ The net investment function → we integrate to find the capital stock.
- Calculate the capital formation during the time period from t = t1 to t = t2 we
evaluate the definite integral:
𝑡2
∫ 𝐼 (𝑡)𝑑𝑡
𝑡1
Example: If the net investment function is given by
I(t) = 800t1/3
Calculate
(a) the capital formation from the end of the first year to the end of the eighth year.
(b) the number of years required before the capital stock exceeds $48 600.
---
8
(a)∫1 800𝑡1/3 𝑑𝑡 = 9000
𝑥
(b) ∫0 800𝑡1/3 𝑑𝑡 = 600T4/3|x0
We need to solve
600x4/3 = 48,600
That is, x4/3 = 81
So x = 813/4 = 27 => 27 years
6. Application IV: Discounting

- If the fund is to provide a continuous revenue stream for n years at an annual
rate of S dollars per year then the present value can be found by evaluating the
definite integral.
𝑛
P = ∫0 Se−rt/100 dt
Example: Calculate the present value of a continuous revenue stream for 10
years at a constant rate of $5000 per year if the discount rate is 6%.
10
P = ∫0 5000e−0.06t dt = 37,599.03
Chapter 7:
Matrices
I. Basic matrix operations
1. Matrix order
#rows x #Column
a11 a12 𝑎13
Example: A 3x3 matrix labelled A would be written: [ 𝑎21 𝑎22 𝑎23]
𝑎31 𝑎32 𝑎33
2. Transposition
Matrix A (m x n) → transposition AT (n x m) – found by replacing rows by
columns
A= (AT)T
3 8
Example: A= [3 5 5] -> AT= [ 5 6]
8 6 5
5 5
3. Matrix addition
*Note: Matrix addition is possible when matrices must be the same size
4. Scalar multiplication
Multiply a matrix A by a scalar k: kA = 𝑘𝑎11 𝑘𝑎12 𝑘𝑎13
𝑘𝑎21 𝑘𝑎22 𝑘𝑎23
5. Subtraction of Matrices
-A= (-1)A
6. Matrix multiplication
Lần lượt lấy ngang x dọc rồi cộng lại
1 2 𝑐11 𝑐12
1 2
Example: 𝐴𝐵 = [0 1] [ ] = [𝑐21 𝑐22]
3 4
3 1 𝑐31 𝑐32
A has size 3x2, B has size 2x2 => AB has size 3x2
c11= a11(b11) + a12(b21)= 1.1 + 2.3= 7
c12= a11(b12) + a12(b22)= 1.2+ 2.4= 10
c21= a21(b11) + a22(b21)= 0.1+ 1.3= 3
c22= a21(b12) + a22(b22)= 0.2 + 1.4= 4
c31= a31(b11) + a32(b21)= 3.1+ 1.3= 6
c32= a31(b12) + a32(b22)= 3.2+ 1.4= 10

7 10
=> AB= [3 4 ]
6 10
*Note: AB ≠ BA
II. Matrix inversion
* A-1A = I and AA-1 = I
1 0
Matrix I (2x2): I= [ ]
0 1
1 0 0
Matrix I (3x3): I= [0 1 0]
0 0 1
𝑎 𝑏
*Determinant: det(A) or |𝐴| 𝑜𝑟 | |
𝑐 𝑑
Det (A) = 0 → singular
Det (A) ≠ 0 → non – singular → inverse
* Ax = b => x = A-1b
𝑎 𝑏
1. Matrix 2x2 [ ]
𝑐 𝑑
Det(A)= ad-bc
1 𝑑 −𝑏
A-1= [ ]
|𝐴| −𝑐 𝑎
Example:
(2)
3. Matrix 3x3
a11 a12 a13
[a21 a22 a23]
a31 a32 a33
- B1: Cofactor (Aij)
• The cofactor Aij = det(A) [matrix (2x2)] when delete row i and column j
+ − +
• Prefixed by a ‘–’ sign because from the pattern: [− + −]
+ − +
- B2: Det(A)
Det(A) = a11A11 + a12A12 + a13A13
= a12A12 + a22A22 + a32A32
= a13A13 + a23A23 + a33A33
- B3: Inverse
• Adjugate matrix = Cofactor gốc
• Adjoint matrix= (Co)T
𝟏
A-1= . adjoint matrix
|𝑨|
II. Cramer’s rule
Ax = b, where
i=1 2 3
𝑎11 𝑎12 𝑎13 𝑥1 𝑏1
𝐴 = [𝑎21 𝑎22 𝑎23] x=[𝑥2] 𝑏 = [𝑏2]
𝑎31 𝑎32 𝑎33 𝑥3 𝑏3
-B1: Tìm matrix Ai
Ai -> thay cột i=[b]

det (𝐴𝑖)
-B2: Cramer’s rule: xi=
det (𝐴)
Example:
(1)
(2)
Chapter 8:
Linear Programming
- Feasible region: the set of points that satisfy all the constraints (the
inequalities given...)
*Step by step to solve a linear programming problem
Define the objective function which need to be optimized and the constrained
inequalities from the data given.
- Step 1: Sketch the feasible region
• The line ... passes through (0, x1) and (x2, 0)
• Verify that the test point (0, 0) satisfies the corresponding constraints or
not.
• Define the feasible region.
Step 2: Identify the corners of the feasible region and find their coordinates.
Step 3: Evaluate the objective function at the corners and choose the one
which has the maximum or minimum value.
Example: A publisher decides to use one section of its plant to produce two
textbooks called Microeconomics and Macroeconomics . The profit made on
each copy is $12 for Microeconomics and $18 for Macroeconomics. Each
copy of Microeconomics requires 12 minutes for printing and 18 minutes for
binding. The corresponding figures for Macroeconomics are 15 and 9
minutes, respectively. There are 10 hours available for printing and 10.5
hours available for binding. How many of each should be produced to
maximise profit?
---

Final Revision

Uploaded by

Copyright:

Available Formats

Final Revision

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Final Revision

Uploaded by

Copyright:

Available Formats

1 MATH FOR BUSINESS TA: VŨ THỊ THU TRANG

b) f(x, y) = x2y3 – 10x

2. Second-order derivatives of a functions of 2 variables

b) f(x,y) = x2y3– 10x

fyx = fxy = 6xy2

f(x1, x2, x3) = x1x2 + x15– x22x3

Example: If z = xy – 5x + 2y, evaluate:

a) Use the small increments formula to estimate the change in z as x

II. Partial elasticity and marginal functions

Inelasticity: |E| <1

+ Ey < 0 → inferior goods (white bread, instant noodle, bus transportation)

Example: Given the demand function:

Where P = 20, PA = 30 and Y = 5000, find

So the demand rises by 0.12 x 5 = 0.6%

- When both x1 and x2 change simultaneously, we can use the small

- We would expect the second derivative to be negative given the law of

Where x1 is the amount of leisure measured in hours per week and x2 is

When x1 = 138 and x2 = 500

- The increase in x2 required to maintain the current level of utility when

∆x2 = MRCS x ∆x1

Which shows that there is just one stationary point at (0,1).

2.2. The Lagrange multiplier

L = f(x, z) + λ(M − g(x, z))

Cách 1: Q= 10K1/2 𝐿1/4 Subject to 4K+5L=60

=> K=10, => L=4

=> K=10, => L=4

2. Application I: Revenue, Costs And Profit

So demand equation is P = 100 − 3Q

4.Application Ii: Consumer And Producer Surplus

Example: Given the demand equation P = 50 − 2QD and supply equation P = 10 +

5. Application III: Investment Flow

That is, x4/3 = 81

So x = 813/4 = 27 => 27 years

6. Application IV: Discounting

Lần lượt lấy ngang x dọc rồi cộng lại

c11= a11(b11) + a12(b21)= 1.1 + 2.3= 7

c12= a11(b12) + a12(b22)= 1.2+ 2.4= 10

c21= a21(b11) + a22(b21)= 0.1+ 1.3= 3

c22= a21(b12) + a22(b22)= 0.2 + 1.4= 4

c31= a31(b11) + a32(b21)= 3.1+ 1.3= 6

c32= a31(b12) + a32(b22)= 3.2+ 1.4= 10

= a12A12 + a22A22 + a32A32

= a13A13 + a23A23 + a33A33

Ai -> thay cột i=[b]

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.