17-11-2012, 06:24 PM
. Basic Mathematical Tools of Economic Analysis
1Basic Mathematical Tools.ppt (Size: 314.5 KB / Downloads: 35)
Concepts of variables & functions
VARIABLES – A quantity which varies from one individual observation to another
Types –
Discrete- Variable which can be expressed in integer values
Continuous –Variable which can take quantitatively different values even in decimal numbers
Dependent Variable (DV) - Variable which depends upon or is a consequence of another variable
Independent variable (IV) - Variable which is expected to influence the dependent variable
Concept of slope
Slope – Steepness of a line or a curve
Slope =
Slope of a linear function whether positive or negative, is constant
Slope of a non –linear function changes with change in slope
(Slope of a curve at a point =slope of the tangent drawn at that point.)
Concept of derivative
A tool to measure a small change in the DV due to a small change in the IV
If y = f (x) , the derivative of y in terms of x can be expressed as
Rules of derivatives : -
Constant function rule
Power function rule
Sum (Difference) of functions rule
Product rule
Quotient rule
Chain rule
Partial derivative