# ps1sol_09_addon - Cornell University Economics 3130 Problem...

This preview shows pages 1–2. Sign up to view the full content.

Cornell University Economics 3130 Problem Set 1 Solutions 1. What is Nechyba’s interpretation of what Friedman meant when he said that no one knows how to make a pencil? That no one person knows how to make a pencil from scratch. 2. What are the three basic insights Nechyba attributes to economics? 1) There are many situations in which everyone can win–just because there is a winner does not mean there is a loser, 2) People’s actions are often based on incentives rather than inherent dispositions, and 3) Order can emerge spontaneously without someone designing it. 3. Compute f x (that is, ∂f ∂x ), f y , f xy (that is, 2 f ∂x∂y ), f xx , and f yy for the following functions: (a) f ( x,y ) = 10 x 1 5 y - 1 2 . f x = 2 x - 4 5 y - 1 2 , f y = - 5 x 1 5 y - 3 2 , f xy = - x - 4 5 y - 3 2 , f xx = - 8 5 x - 9 5 y - 1 2 , f yy = 15 2 x 1 5 y - 5 2 (b) f ( x,y ) = 4 e 3 x ln (2 y ). f x = 12 e 3 x ln (2 y ), f y = 4 e 3 x y - 1 , f xy = 12 e 3 x y - 1 , f xx = 36 e 3 x ln (2 y ), f yy = - 4 e 3 x y - 2 (c) f ( x,y ) = 2(2 x - 1) 4 y - 2 . f x = 16(2 x - 1) 3 y - 2 , f y = - 2(2 x - 1) 4 ( y - 2) 2 , f xy = - 16(2 x - 1) 3 ( y - 2) 2 , f xx = 96(2 x - 1) 2 y - 2 , f yy = 4(2 x - 1) 4 ( y - 2) 3 (d) f ( x,y ) = x 3 y . f x = 3 y , f y = x ( ln 3)3 y , f xy = ( ln 3)3 y , f xx = 0, f y = x ( ln 3) 2 3 y 4. Suppose that there are two goods:

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 3

ps1sol_09_addon - Cornell University Economics 3130 Problem...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online