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Questions › DSE › DSE 2015 › Q31
2 marks, −0.666666666666667Mathematics › Multivariable calculus › Implicit functions, level curves and second-order conditionsHardabout 4 min

DSE 2015 Question 31: Multivariable calculus

For a strictly increasing differentiable u:R2→Ru:\mathbb{R}^2\to\mathbb{R}u:R2→R, consider D1u(x1,x2)D2u(x1,x2)=p1p2\tfrac{D_1u(x_1,x_2)}{D_2u(x_1,x_2)}=\tfrac{p_1}{p_2}D2​u(x1​,x2​)D1​u(x1​,x2​)​=p2​p1​​ and p1x1+p2x2=wp_1x_1+p_2x_2=wp1​x1​+p2​x2​=w. What guarantees existence of continuously differentiable demand functions x1(p1,p2,w),x2(p1,p2,w)x_1(p_1,p_2,w),x_2(p_1,p_2,w)x1​(p1​,p2​,w),x2​(p1​,p2​,w) solving these for all positive p1,p2,wp_1,p_2,wp1​,p2​,w?

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For a strictly increasing differentiable u:ℝ²→ℝ, consider (D₁u(x₁,x₂))/(D₂u(x₁,x₂))=p₁/p₂ and p₁x₁+p₂x₂=w. What guarantees existence of continuously differentiable demand functions x₁(p₁,p₂,w),x₂(p₁,p₂,w) solving these for all positive p₁,p₂,w? (A) u is injective (B) u is bijective (C) u is twice continuously differentiable (D) u is twice continuously differentiable and the relevant Jacobian matrix [[D₁₁u p₂-D₁₂u p₁ D₁₂u p₂-D₂₂u p₁; p₁ p₂]] is nonsingular

Also written as: For a strictly increasing differentiable u:R^2->R, consider (D_1u(x_1,x_2))/(D_2u(x_1,x_2))=p_1/p_2 and p_1x_1+p_2x_2=w. What guarantees existence of continuously differentiable demand functions x_1(p_1,p_2,w),x_2(p_1,p_2,w) solving these for all positive p_1,p_2,w?

Multivariable calculus has come up 32 times in 7 exams since 2007.

What this question tests

This question is on Implicit functions, level curves and second-order conditions, part of Multivariable calculus in Mathematics.

Slopes of level curves and implicit functions, and conditions for optima in two variables.

TestStop has 8 past-paper questions on this subtopic.

Practise Multivariable calculusMore on Implicit functions, level curves and second-order conditions

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Question from the DSE 2015 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.