Answer any 5 out of 6 questions:

1. Evaluate the following limits and derivatives:

a) [5 marks] b) [5 marks]

c) [ ] [5 marks] d) ( ) [5 marks]

2. a) Find using implicit differentiation: . [15 marks]

b) Estimate the slope of the function in a) at the point . [5 marks]

3. a) Linda has inherited $10,000 from her fathers estate. She will invest the money for 3 years.
She is considering two investments: a money market fund that pays a guaranteed 5.25% interest
compounded monthly and a 3-year government bond at 6% annual interest. Which investment pays
the most interest over the 3-year period? [10 marks]
b) In 3 years, Mrs. Abigail must pay a pledge of $7,500 to her favourite charity. What lump sum
should she deposit today at 10% compounded semiannually so that she will have enough to pay the
pledge? [10 marks]

4. Demand for and supply of a product, QD and QS respectively, are known to be linear functions of
its price, P. When the price is $1, demand is 760 and supply is 60. For every extra unit increase in
price, demand decreases by 20 and supply increases by 15.
a) Write down the demand and supply equations. [10 marks]
b) Find the equilibrium price and quantity. [5 marks]
c) Calculate the price elasticity of demand at the point of equilibrium. [5 marks]

5. The manager of a firm believes that the amount of the firms output, Q, is a function of capital, K,
and labour, L. At a given moment in time, the marginal product of capital is 3, the marginal rate of
technical substitution (of labour for capital) is 0.8, the amount of capital is increasing by 2 per unit
of time and the rate of change of labour is +0.5. Estimate the rate of change of output and briefly
comment on your result. [20 marks]

6. An office supply manufacturer makes two kinds of paper clips: standard and extra large. To make
a unit of standard paper clips requires 1/4 hour on a cutting machine and 1/2 hour on a machine that
shapes the clips. A unit of extra-large paper requires 1/3 hour on each machine.
(a) Write this information as a 22 matrix (size/machine). [5 marks]
(b) If 48 units of standard and 66 units of extra-large clips are to be produced, use matrix
multiplication to find out how many hours each machine will operate. [15 marks]