(1) y = 3x2 - 2x + 7. Evaluate y' for x = 2.

y' = 6x - 2
for x =2 f'(2) = 10
(2) y = -x3 + 2x2 - 3x + 2. Evaluate y' for x = 3.
y' = -3x2 + 4x - 3
For x = 3, y' = -18

(3) y = (x - 2)(x - 3). Evaluate y' for x = 2.

Via FOIL, y = x2 - 3x -2x + 6
y = x2 - 5x + 6
y' = 2x - 5
For x = 2, y' = -1

(4) y = 5 + 2 . Evaluate y' for x = 4.

Since y = 5 + 2 is a horizontal line, the value of its derivative at any point x is
always 0.

(5) Suppose that L workers produce a product and that the number of units produced
is given by f(L) =100L.5. The principles of economics hold that increasing units of a
resource yields diminishing returns. Diminishing returns means that each additional
unit of the resource is less productive. Explain how this "production function" is
consistent with diminishing returns. f'(L) = 50L^-.5

As the graph of f(L) shows, the slope of this production function is higher for
lower values of x; in other words, the lower the x value, the greater impact a
change in x (number of workers) will have on the corresponding y value
(production). f"(L)=-25L^-1.5<0 so slope is decreasin

10000 L f(L)
100 1000
9000
1100 3316.625
8000 2100 4582.576
3100 5567.764
7000
4100 6403.124
6000 5100 7141.428
Producton

6100 7810.25
5000
7100 8426.15
4000 8100 9000
9100 9539.392
3000

2000

1000

0
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Workers
2000

1000

0
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Workers
L^-1.5<0 so slope is decreasing
(1) Is f(x) =1/x2 a convex or a concave function of x, for all values of x 0?
f(x) = x-2
f'(x) = -2x-3
f''(x) =6 x-4

The second derivative of this function, f''(x) =6 x -4, is positive for all non-zero
values of x. Thus, f(x) = x-2 is convex for all non-zero values of x.
(2) Show that f(x) = x3 is neither a convex nor a concave function.
f"(x) = 6x for x>0 this is >0 and for x<0 this is <0, so f(x) is neither convex or
concave.
(3) Show that f(x) = -2x2 - 3x is a concave function of x.
f'(x) = -4x - 3,
f"(x)=-4<0 so f(x) is a concave function.
(4) Suppose that it costs the automobile manufacturer $9000 to produce a hybrid and
that the demand for hybrids (in thousands) for a price of p thousand dollars is
expressed by f(p) = 40 - 3p. What price for hybrids will maximize the company's profit?
How would the answer change if f(p) = 500p -2?
Part 1

Part 1: If price is p thousand dollars and demand is 40 - 3p, then revenue is p(40 - 3p)
and cost is 9(40 - 3p) (we will assume that we can manufacture to demand). Profit is
then p(40 - 3p) - 9(40 - 3p). price p (in thousands)

Profit under these assumptions is thus 40p - 3p 2 - 360 + 27p, or -3p2 + 67p - 360. 9
The first derivative of this profit function is -6p + 67. 9.1

The second derivative is -6. Since the second derivative < 0 for all values of p, the
profit function is concave, and its maximum value can be found by setting its first
derivative to 0. 9.2
Taking -6p + 67 = 0, we find that p is roughly 11.167, or that a price of $11,167
dollars will maximize profits. 9.3
9.4

Part 2: If demand f(p) = 500p-2, then profit is p(500p-2) - 9(500p-2), or 500p-1 - 4500p-2. 9.5

The first derivative of this profit function is -500p -2 + 9000p-3. This function equals
0 where x = 18. This is the only point where the first derivative equals 0, and
since the second derivative (1000p-3 - 27000p-4) is negative here, we know that p
= $18,000 yields maximum profit.. 9.6
9.7
9.8
9.9
10
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
11
11.1
11.167
11.2
11.3
11.4
11.5
11.6
11.7
11.8
11.9
12
12.1
12.2
12.3
12.4
12.5
12.6
12.7
12.8
12.9
13
13.1
13.2
13.3
13.4
13.5
13.6
13.7
13.8
13.9
14
14.1
14.2
14.3
14.4
14.5
14.6
14.7
14.8
14.9
15
15.1
15.2
15.3
15.4
15.5
15.6
15.7
15.8
15.9
16
16.1
 Part 2

profit, where demand f(p) = 40 - 3p price p (in thousands) profit, where demand f(p) = 500p -2

0 9 0
1.27 10 5

2.48 11 8.2644628099

3.63 12 10.4166666667
4.72 13 11.8343195266

5.75 14 12.7551020408

6.72 15 13.3333333333
7.63 16 13.671875
8.48 17 13.8408304498
9.27 18 13.8888888889
10 19 13.8504155125
10.67 20 13.75
11.28 21 13.6054421769
11.83 22 13.4297520661
12.32 23 13.2325141777
12.75 24 13.0208333333
13.12 25 12.8
13.43 26 12.573964497
13.68 27 12.3456790123
13.87 28 12.1173469388
14 29 11.8906064209
14.07 30 11.6666666667
14.083333 31 11.4464099896
14.08000 32 11.23046875
14.03 33 11.0192837466
13.92 34 10.8131487889
13.75 35 10.612244898
 13.52 36 10.4166666667
13.23 37 10.2264426589
12.88 38 10.0415512465
12.47 39 9.8619329389
12 40 9.6875
11.47 41 9.5181439619
10.88 42 9.3537414966
10.23 43 9.1941590049
9.52 44 9.0392561983
8.75 45 8.8888888889
7.92 46 8.7429111531
7.03 47 8.6011770032
6.08 48 8.4635416667
5.07 49 8.3298625573
4 50 8.2
2.87 51 8.0738177624
1.68 52 7.951183432
0.43 53 7.8319686721
-0.88 54 7.7160493827
-2.25 55 7.6033057851
-3.68 56 7.493622449
-5.17 57 7.3868882733
-6.72 58 7.2829964328
-8.33 59 7.1818442976
-10 60 7.0833333333
-11.73 61 6.9873689868
-13.52 62 6.8938605619
-15.37 63 6.8027210884
-17.28 64 6.7138671875
-19.25 65 6.6272189349
-21.28 66 6.5426997245
-23.37 67 6.4602361328
-25.52 68 6.3797577855
-27.73 69 6.3011972275
-30 70 6.2244897959
-32.33 71 6.1495734973
-34.72 72 6.0763888889
-37.17 73 6.0048789642
-39.68 74 5.9349890431
-42.25 75 5.8666666667
-44.88 76 5.7998614958
-47.57 77 5.734525215
-50.32 78 5.6706114398
-53.13 79 5.6080756289
-56 80 5.546875
-58.93 81 5.4869684499
The first derivative is -500p-2 + 9000p-3 The second derivative is 1000p-3 - 27000p-4.

6.1728395062 -2.743484225
4 -1.7

2.6296018032 -1.0928215286

1.7361111111 -0.7233796296
1.1379153391 -0.4901789153

0.7288629738 -0.3384006664

0.4444444444 -0.237037037
0.244140625 -0.1678466797
0.1017708121 -0.1197303672
0 -0.085733882
-0.0728969237 -0.0613868832
-0.125 -0.04375
-0.1619695497 -0.0308513428
-0.1878287002 -0.0213441705
-0.2054738226 -0.0142938311
-0.2170138889 -0.0090422454
-0.224 -0.00512
-0.2275830678 -0.0021882987
-0.2286236854 0
-0.2277696793 0.0016269263
-0.2255115011 0.0028277304
-0.2222222222 0.0037037037
-0.2181867007 0.0043312496
-0.2136230469 0.0047683716
-0.2086985558 0.0050593589
-0.2035416243 0.0052382036
-0.1982507289 0.005331112
-0.1929012346 0.0053583676
-0.1875505893 0.0053357209
-0.1822423094 0.0052754353
-0.1770090527 0.0051870785
-0.171875 0.005078125
-0.1668577066 0.0049544176
-0.1619695497 0.0048205223
-0.1572188612 0.0046800033
-0.1526108189 0.0045356362
-0.1481481481 0.0043895748
-0.1438316758 0.0042434811
-0.1396607688 0.0040986286
-0.1356336806 0.0039559823
-0.1317478262 0.0038162636
-0.128 0.00368
-0.1243865482 0.0035475664
-0.1209035048 0.0034192168
-0.1175466996 0.0032951096
-0.1143118427 0.003175329
-0.1111945905 0.0030599003
-0.1081905977 0.0029488039
-0.1052955565 0.0028419853
-0.1025052278 0.0027393638
-0.0998154631 0.002640839
-0.0972222222 0.0025462963
-0.0947215846 0.002455611
-0.092309758 0.0023686521
-0.0899830832 0.0022852847
-0.0877380371 0.0022053719
-0.0855712335 0.002128777
-0.0834794223 0.0020553646
-0.081459488 0.0019850012
-0.079508447 0.0019175567
-0.0776234441 0.001852904
-0.0758017493 0.0017909204
-0.0740407531 0.0017314872
-0.072337963 0.0016744899
-0.0706909981 0.0016198186
-0.0690975855 0.001567368
-0.0675555556 0.001517037
-0.0660628371 0.0014687291
-0.0646174537 0.0014223521
-0.0632175188 0.0013778177
-0.0618612321 0.0013350422
-0.060546875 0.0012939453
-0.0592728073 0.0012544509
(5) Let K = the cost of placing an order for digital cameras, D = the annual demand for
digital cameras, h = the cost of holding a digital camera in inventory for a year, and c =
the cost per camera ordered. Smalltown's electronics store knows that the annual cost
for stocking cameras will be (KD/q) + cD +.5hq. Show that an order quantity (called the
economic order quantity or EOQ) of (2KD/h) minimizes the total annual cost of
stocking cameras.
f(q) = KDq-1 + cD +.5hq
f'(q) = -KDq-2 + .5h
Setting f'(q) equal to 0, we find
-KDq-2 + .5h = 0
.5h = KDq-2
.5hq2 = KD
q2 = 2KD/h
q = (2KD/h)

f''(q) = 2KDq-3
Since f''(q) is positive for all positive order quantities, we know that the EOQ
obtained by setting f'(q) to 0 is a minimum.
(6) Suppose that you have 100 yards of fencing and want to build a rectangular fence that encloses
the maximum possible area. What should the dimensions of the fence be? Hint: If L = the length of
the rectangle and W = its width, 2L + 2W = 100. First solve for L in terms of W; then choose L to
maximize the area of the fence.
Constraint on dimensions
2L + 2W = 100
2L = 100 - 2W
L = 50 - W

We want to maximize LW
subject to 2L+2W = 100
or L+W=50.
So we know W = 50 -L
and we want to maximize
f(L)= L(50-L) = 50L -L^2
f'(L)= 50-2L is 0 for L = 25
f"(L) =-2, so L =25 and W=25 is a maximum.
(7) Suppose that you want build a rectangular fence that encloses 2500 square yards. What is
the minimum amount of fencing needed?
Constraint on area
LW = 2500
L = 2500/W

Function to minimize: Amount of fencing required=2L+2W

Substituting 2500/W for L: 2(2500/W) + 2W

f(W) = 5000W-1 + 2W
Objective: Minimize 5000W-1 + 2W
First derivative: -5000W-2 + 2

Since only positive values of W are relevant to the problem, and since the second derivative:
10000W-3 is > 0 for all positive values of W, the portion of the function that we are concerned
with is convex, and the minimum value that we are concerned with can be found where f'(W)
is zero, provided that W at this point is positive.

f'(W) = 0 at W = -50 and W = 50. Since we know that f(W) is convex for positive values of W, we
find that W = 50 will minimize the fencing required to enclose 2500 square yards.
From the constraint on area enclosed, we know that L = 2500/W, or 50. W
5
10
15
20
25
30
35
40
45
50
L area enclosed fencing required
500 2500 1010.00
250 2500 520.00
166.6667 2500 363.33
125 2500 290.00
100 2500 250.00
83.33333 2500 226.67
71.42857 2500 212.86
62.5 2500 205.00
55.55556 2500 201.11
50 2500 200.00
(1) Suppose that the cost of producing x hundreds of bagels is c(x) = 150 + 5x 3 - 12x2 + 50x. At what level of
production does the bagel cost curve have an inflection point? Does the cost function change from convex to
concave or from convex to concave?
c(x) = 150 + 5x3 - 12x2 + 50x
c'(x) = 15x2 - 24x + 50
c''(x) = 30x - 24
Setting c''(x) to 0, we find that an inflection point occurs at x = .8

From the table of x and c''(x) values to the right, we can see that for values < .8, c(x) is concave, and that for
values > .8, c(x) is convex. In other words, as x increases, the cost function changes from concave to convex.
x c''(x)

0.2 -18
0.4 -12
0.6 -6
0.8 0
1 6
1.2 12
1.4 18
1.6 24
1.8 30
2 36
2.2 42