ECO 244: Applied Mathematics II Section 4 and 11 Summer 2012 North South University Assignment 3 Full marks: 90 Time

of Submission: 11th August, till 2:00 pm Person to be submitted to :ME

1 0.25

1) We are given a following production function, Q = 80 0.4 K 0.25 + (1 0.4) L0.25 a) Find out the MRTS. b) Find out an expression for the expansion path. c) What is the elasticity of substitution? 2) Given a production function, Q=40K0.6L0.4 a) Find out the MRTS. b) Find out an expression for the expansion path. c) What is the elasticity of substitution? 3) Evaluate the following integrals: dx a) 3 x x+7 b) 6 xe dx 3x 2 + 2 4 x3 + 8 xdx 2 2x d) x e dx e) x2lnx2 3 6x f) 0 2 dx x +1 2x dx . g) 2 1 (x + 1) c)

(6) (2) (2) (6) (2) (2) (2) (3) (3) (4) (4) (3)
1

4)

a) Given the Marginal Propensity to save, MPS = 0.3 0.1Y 2 find out the Saving and consumption functions, where S=0 when income is 81. (Income =y) (2) b) What is the present value of the income stream generating 3000 taka a year continuously with a discount rate of 6% for 2 years. What is the value of a perpetuity with such characteristics? (2) 2 c) Under a Monopoly, the demand function is P = 200 Q and Marginal Cost function is MC = 1 + 2Q . Find out the Consumer Surplus. Why cant we have a Producer Surplus in this case? (4)

5) a) Given the following demand and supply functions and assuming market clears at every point, find out the time path of price, P(t). dP Qd = P and Qs = P dt I) What is the market clearing price? (4) II) Assuming market adjusts as a fraction of excess demand, find out the time path of price and also the intertemporal equilibrium price. (6) 2 b) Solve the following exact differential equation: (t + 2 y )dy + ( y + 3t ) dt = 0 (3) c) Using Bernoulli Linearization, solve the following differential equation: y 2t dy + dt = 0 (3) y +t y+t d) Using the same equation, see whether the separable variable method gives the same result or not. (3) e) Solve the following first order linear and verify its result: dy/dx+7y=7 where, y(0)=7 (3) f) Solve the following first order linear differential equation: dy/dt+ty=t2 (4) h) Find out the integrating factors for the following inexact differential equations and then solve them. (5x2=10) i) t2dy+3ytdt=0 ii) (y-t)dy-dt=0 6. a) Solve the following first order difference equation: yt +1 = yt , where ( yt = y0 where t = 0 )

(4) b) Solve the following first order difference equation and comment on its dynamic stability: yt +1 = 0.2 yt + 4 where ( y0 = 4) (6)