ECON0006 Summer 2024 Paper Final Version

SUMMER TERM 2024
DEPARTMENTALLY MANAGED REMOTE ONLINE EXAMINATION

ECON0006: INTRODUCTION TO MATHEMATICS FOR ECONOMICS
Assessment Component: 80% Remote Online Controlled Condition Examination

Time Allowance: You have 2 hours to complete this examination, plus an additional collation
time of 20 minutes and an Upload Window of 20 minutes. The additional collation time has
been provided to cover any additional tasks that may be required when collating documents for
upload, and the Upload Window is for uploading and correcting any minor mistakes. The
additional collation time and Upload Window time allowance should not be used for additional
writing time.
If you have been granted SoRA extra time and/or rest breaks, your individual examination
duration and additional collation time will be extended pro-rata and you will also have the 20-
minute Upload Window added to your individual duration.
If you miss the submission deadline during the 40-minute Late Submission Period and do not
receive approved mitigation for the circumstances relating to your late submission, a Late
Submission Penalty will be applied by the Module Administrator. At the end of the Late
Submission Period, you will not be able to submit your work via Moodle and you will not be
permitted to submit work via email or any other channel.
All work must be submitted anonymously in a single PDF file. Do not write your name and
student number in either the file or the file name. The file name must be in the following
format: Module Code-%Exam i.e. ECON0006-80%Exam.
Page Limit: 24 pages.
Academic Misconduct: By submitting this assessment, you are confirming that you have not
violated UCL’s Assessment Regulations relating to Academic Misconduct contained in Section
9 of Chapter 6 of the Academic Manual.
Number of Questions Answered Policy: In cases where a student answers more questions
than requested by the examination rubric, the policy of the Economics Department is that the
student’s first set of answers up to the required number will be the ones that count (not the best
answers). All remaining answers will be ignored.
ECON0006 1 TURN OVER

QUESTIONS
Answer ALL FIVE questions from Part A and TWO questions from Part B.
Questions in Part A carry 10 per cent of the total mark each and questions in Part B carry
25 per cent of the total mark each.
PART A
1. Find the values of a for which the matrix
 2a 3 
 a a + 4
 
is not invertible.
For all other values of a find an expression for the inverse.
2. Find the range of values of k for which the quadratic forms
𝑞(𝑥1 , 𝑥2 ) = 𝑥12 + 𝑘𝑥1 𝑥2 + 𝑥22
𝑟(𝑥1 , 𝑥2 ) = 𝑘𝑥12 + 𝑥1 𝑥2 + 𝑘𝑥22

are positive definite.
3. Suppose
𝑧 = 𝑦 3 𝑒 𝑥𝑦 .
Use the small increments formula to find, in terms of e, an approximation to the change in z when
x changes from 1 to 1 + Δ𝑥 and y changes from 1 to 1 + Δ𝑦, where x and y are small.
Now suppose you are additionally given
𝑥 = 2𝑡, 𝑦 = 𝑡 2 + 𝑡.
Use the chain rule to find, in terms of e, 𝑑𝑧/𝑑𝑡 when t = 1.
4. Find the x and y coordinates of the critical points of the function
f ( x, y) = 3x 2 − y 3 + 12 xy − 36 y
and classify each critical point as a local maximum, local minimum, saddle point or none of these.
ECON0006 2 CONTINUED
5. Find the general solution of the difference equation
3𝑦𝑡+1 + 2𝑦𝑡 = 3.
What happens to the general solution as 𝑡 → ∞? Find also the solution which satisfies y = 1 when
t = 0 and sketch its graph.
PART B
6. Find the determinant of the matrix

1 2 𝜆
[2 3 −2].
𝜆 1 1
Solve the equation system
𝑥 + 2𝑦 + 𝜆𝑧 = 0
2𝑥 + 3𝑦 − 2𝑧 = 𝜆
𝜆𝑥 + 𝑦 + 𝑧 = 3
for all values of λ.
7. (a) Suppose the production function in an economy takes the form
F ( K , L) = K  L ( ,   0)
where K and L denote capital and labour respectively.

Find a condition in terms of  and  for the production function to exhibit decreasing returns to
scale. Show that if this production function exhibits decreasing returns to scale, then it also exhibits
diminishing returns to each input. State, with reasons, whether the converse is true.
(b) Suppose F ( K , L) is a general production function satisfying F (0,0) = 0 . Show that if
F ( K , L) is concave then it cannot display increasing returns to scale.
(c) Now suppose the production function in an economy takes the form
Q = H ( K , L)ert
where Q, K, L and t denote aggregate output, capital, labour and time respectively. Suppose further
that r is a positive constant, H ( K , L) is homogeneous of degree s where s is a positive constant
and K and L have the same constant proportionate rate of growth m. Find the rate of growth of
output.
ECON0006 3 TURN OVER

8. Consider the production function
𝐾𝐿
𝑄=
𝑎𝐾 + 𝑏𝐿
where Q, K and L denote output, capital and labour respectively and where 𝑎 and 𝑏 are positive
constants.
Sketch the isoquant diagram.

Suppose that the prices of capital and labour are 𝑟 and 𝑤 respectively. Find the cost function.
Find also the elasticity of substitution.
ECON0006 4 END OF PAPER

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SUMMER TERM 2024

DEPARTMENTALLY MANAGED REMOTE ONLINE EXAMINATION

Assessment Component: 80% Remote Online Controlled Condition Examination

ECON0006 1 TURN OVER

2. Find the range of values of k for which the quadratic forms

𝑞(𝑥1 , 𝑥2 ) = 𝑥12 + 𝑘𝑥1 𝑥2 + 𝑥22

𝑟(𝑥1 , 𝑥2 ) = 𝑘𝑥12 + 𝑥1 𝑥2 + 𝑘𝑥22

Now suppose you are additionally given

Use the chain rule to find, in terms of e, 𝑑𝑧/𝑑𝑡 when t = 1.

4. Find the x and y coordinates of the critical points of the function

6. Find the determinant of the matrix

7. (a) Suppose the production function in an economy takes the form

where K and L denote capital and labour respectively.

ECON0006 3 TURN OVER

Sketch the isoquant diagram.

ECON0006 4 END OF PAPER

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