EEC-05

Bachelor's Degree Programme (BDP)

ASSIGNMENT 2011-12

Course Code : EEC-05 Title of Course: Elementary Mathematical Methods in Economics

School of Social Sciences Indira Gandhi National Open University Maidan Garhi, New Delhi-110 068

EEC-05 ELEMENTARY MATHEMATICAL METHODS IN ECONOMICS Assignment

2011-12 Dear Student, As explained in the programme guide for BDP, you will have to do 1 Tutor Marked (TMA) assignment for this elective course in EEC-05.

Before attempting the assignments please read the instructions provided in the programme guide sent to you separately.

Submission: The completed assignments should be submitted as per the following schedule:

Assignment Nos. Assignment-1(TMA) July 2011 Session Assignment-1(TMA) January 2012 Session

Date of Submission 30.4.2012

Where to Send The Co-ordinator of your study centre. The Co-ordinator of your study centre.

30.9.2012

EEC-05: ELEMENTARY MATHEMATICAL METHODS IN ECONOMICS

ASSIGNMENT-1 TMA
Programme: BDP Course Code: EEC-05 Assignment Code: EEC-05/TMA/2011-12 Max. Marks: 100

A. Long Answer Questions (Answer any two questions) 1. 2.

2x20 = 40

Discuss the importance of the Hawkins-Simon conditions in input-output analysis. Consider the following two matrices:

A=

-1 1 2 1 -1 -2 -2 2 4

B=

1 0 -1 1 1 -1

-1 1 -1

(i) (ii) (iii) (iv) 3.

Find the rank of A & B Show that (AB)-1 = B-1 A-1 Show that (A-1)-1 = A Show that (B)-1 = (B-1)

Consider the following Macro-Model (Multiplier Accelerator Interaction): Yt = Ct + It + Gt Ct = C0 + Yt-1 It = I0 + ( Ct Ct-1) Where 0 < < 1 ; > 0 ; and Gt = G0 (i) (ii) Find the time path Y(t) of national income, and Comment on the stability conditions

4.

An individual consumer consumes two commodities X1 & X2. The utility function is
0 0 U X 1 .4 X 2 .6

The price of commodity one is P1 = Rs.3.00, the price of commodity two is P2 = Rs.4.00, the individuals income per period is Rs.108. Using lagrange multiplier technique determine the utility maximizing level of X1 & X2. B. Medium Answer Questions (Answer three questions) 5. Solve the initial value problem. The differential equation is
d2y dy 2 10 y 0 dx dx2

3x12=36

Given Y(0) = 4 dy (0) = 1 dx 6. Let Z = f(x,y) = 3x3-5y2-225x + 70y + 23. (i) (ii) Find the stationary points of z. Determine if at these points the function is at a relative maximum, relative minimum, infixion point, or saddle point.

7.

Consider the demand function given by q = f (p,y) = 10y2 +2y4p-2-3p2 obtain

dy when the quantity q is held constant. dx

8.

Using Taylors series and by evaluating derivatives, show that

1 1 1 1 4 Log (1 e x ) x x 2 x ........ 2 2 8 192

Assume that the series is convergent.

9.

Are the following series convergent or divergent? 1.

1 1 1 .......... 2 3 4

2. 3.

1 a a 2 ........

1 1 1 .......... 2 3 4

4.

1 1 1 ......... 1.2 2.3 3.4

10.

How long will it take a given sum of money (Say in Rupees) to increase 4 times its present value when compounded half yearly at 7% rate of interest? 3x8=24

C. Short Answer Questions ( Answer any three questions)

11.

Evaluate the Limits of

X2 X 2 As X 2. X ( X 2)

12.

If the demand function for a good is Q=140 5P, what is the price elasticity of demand at P = 15 rupees? If Z = f(x,y) = xy Find the maximum value for f(x,y) if x & y are constrained to sum to 1 (That is x+y = 1). Solve the problem in two ways: By substitution and by using the Lagrangian multiplier method.

13.

14.

Define a. b. c. Adjugate of a matrix Decomposable matrix Singular matrix

15.

Determine the characteristic roots and the characteristic vectors of the matrix 2 2 1 0

A= 16.

Distinguish between direct input use and indirect input use in input-output analysis. Do the same for the Matrix. 1 B= 2 1 0