6. Formula for price elasticity of demand? What the one for the income elasticity of demand? What is the cross price elasticity of demand? Use: D:Q(P)
7. What is “Polonius’ point”? Set up the intertemporal utility maximization problem for an individual over two periods (i.e., t = 1, 2). Find the formula for consumption in the first period as a function of the interest rate, the discount rate, and income over the two periods.
8. What is l’Hopital’s Rule? Use the rule to find the following limit: lim \(\lim_{x_{\vec{ }}0}\frac{e^x-1}{x}\)
9. Define convex, concave, strictly convex, and strictly concave curves using the notion of derivative (hint: not just first derivative!)
\(f(x)\) is a concave function over the interval I \( \Longleftrightarrow \) \(f^{''}(x)\leq 0,\ \forall x \in I\)
\(\)
\(\)\(g(x)\) is a convex function over the interval I \( \Longleftrightarrow \) \(g''(x)\ge 0,\ \forall x \in I\)