1.1 The number of solutions depends on parameters a,b,c, and is either infinite or zero; by Gaussian elimination it turns out that the multiplier matrix is not of full rank and a condition for parameters a,b,c is found such that there are either no solution or infinitely many of them. Correctly done Gaussian elimination 3 points The case of inf solutions 1p, the case of no solutions 1p. 1.2 Correct answer with anything else than the cramers rule 2p Note: missing the condition that the determinant of the multiplier matrix non-zero -1p. 2.3 Solutions, i.e., partial derivatives of $z$ involving non-numeric value for z were accepted. 2.4. Note: byt the chain rule the solution is d z(x(1),y(1))/dt= dz/dx *dx(1)/dt+ dz/dy dy(1)/dt where dz/dx and dz/dy are the partial derivates obtained in 2.3. 3.1 Definition of homogeneity +1 Correctly verifying it for the given function +1 3.2 If only some lements in the profit function were correct 1p 3.3 Note: all principal minors were needed, not only leading principal minors (-1p if only leading pm's were used) 4.1-4.2 Correct FOCs +2p. Only one critical point was asked. The function has two and both were ok: (x,y)=(0,1) and (x,y)=(e^{-2},e^2), and both are saddle points. 4.3 Function is not bounded; log goes to minus infinity when x_2 goes to zero and infinity when x_2 goes to infinity. Hence, there are no global optima.