101A_problemset1

101A_problemset1 - Econ 101A Problem Set 1 Due in class on...

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

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Econ 101A Problem Set 1 Due in class on Th 5 February. No late Problem Sets accepted, sorry! This Problem set tests the knowledge that you accumulated in the f rst 4 lectures. It is mostly on the mathematical techniques that we developed, but there is also some application to consumer decisions, as introduced in Lecture 4. General rules for problem sets: show your work, write down the steps that you use to get a solution (no credit for right solutions without explanation), write legibly. If you cannot solve a problem fully, write down a partial solution. We give partial credit for partial solutions that are correct. Do not forget to write your name on the problem set! Problem 1. Univariate unconstrained maximization. (10 points) Consider the following maxi- mization problem: max x f ( x ; x ) = exp( ( x x ) 2 ) 1. Write down the f rst order conditions for this problem with respect to x (notice that x is a parameter, you should not maximize with respect to it). (1 point) 2. Solve explicitely for x that satis f es the f rst order conditions. (1 point) 3. Compute the second order conditions. Is the stationary point that you found in point 2 a maxi- mum? Why (or why not)? (2 points) 4. As a comparative statics exercise, compute the change in x as x varies. In other words, compute dx /dx . (2 points) 5. We are interested in how the value function f ( x ( x ); x ) varies as x varies. We do it two ways....
View Full Document

Page1 / 2

101A_problemset1 - Econ 101A Problem Set 1 Due in class on...

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

View Full Document Right Arrow Icon
Ask a homework question - tutors are online