Question

1. Answer four of the following, each question carries equal weight. In each case answer True, False or Uncertain and explain your answer. Limit each answer to one page (a) A firm has a cost function that shows the minimum cost of producing a given level of output, Q. Cost ed then C-exp(Q) would be a rises with Q at an increasing rate. Based only on the information provid valid representation of this firm's cost function. Consider a person who begins day 0 with 100 euro. At the start of the next day her money is halved and s continues for 2 weeks (14 days). After N days the amount of money she holds is given by the formula (Money-100*2N) and the amount of money after 14 days is less than l. (c) Consider the system of equations This system has a unique solution. (d) Suppose an individual's health (H) depends on the amount they exercise (E) and their weight (W) and 82H e -o-H. 0, this means that the benefit of exercise is the same is given by the relationship H-E-W. Since for all people irrespective of their weight. (e) Consider an individual who is offered €1000 ten years from now. The interest rate is 30% and interest is compounded annually. The present value of this offer is approximately 50

Answer 1

(c) X + Y = 1, X + Z = 1 thus X + Y = X + Z rightdoublearrow y = z, so system has infinite solution (d) H = e - w, partial differential H/partial differential E = 1, Now partial differential H/partial differential w partial differential E = partial differential (partial differential H/partial differential E)/partial differential w = 0 Thus as weight uparrow, Benefit of Exercise remain same) true) \r\n (a) True rightarrow as C = e^Q, then partial differential c/partial differential Q = e^Q, partial differential^2 c/partial differential Q^2 = e^Q > 0, Thus as Q uparrow, C uparrow at an increasing Rate b CO_2 partial differential^2 c/partial differential Q^2 > 0, (b) Now False rightarrow Correct formula money = 100 /2^N, so after 14 days Money = 100/2^14 < 1 \r\n (e) from compound