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Differentiation

y = f (x) x k, constant x2 x3 ex e 0

dy = f(x) dx

,y) m= Graphs of Common(xFunctions x 2 x1


1 1

Po

siti

y 2 y1

Linear

y = mx + c; m = gradient; c = vertical intercept


g t ien rad

xn, any constant n e kx


f (x)

2x

3x2

ex = y 1/x

nxn1

(x1, y1)

Po

ve siti

y y1 m= 2 x 2 x1

(x2, y2)

(x1, y1)
Ne gat

m=

ive

y 2 y1 x 2 x1
(x2, y2)

gra

Studying Economics

die nt

ln kx = log kx dv d 1/x du d du dv (u( x) v( x )) = e (u( x) v( x )) = d x d x dx d x dx dx ln f (x) f(x)/f(x) d du dv (u( x) v( x )) = dx dx dx d du dv df d f d d (u( x) v((x k)) = f ( x )) =k The sumdifference rule Constant multiples (k f (x )) = k dx dx dx dx dx dx dx df du dv d d ( k f ( x )) = k (u( x) v( x )) = x x d d d x d x dx d du d = k df dv dv du dfor k constant ( k f ( x )) v uv u ( ) = + (uv) = u +v dx dx dx dx dx dx dx dx df v d du d Thed product rule The quotient rule ( k f ( x )) = k v uv u ( ) = + dxdu dx x dv d dx dx d v d u d dv d vu u v u (uv) = u d u+ v dx d u d x d x d x dx d x = dx 2 = du 2 dv dx d v dx v v du v d v vu (uv) = u +v d u dx dx = x x d d dx The chain rule du dv dx v v u v2 d u dy dy . du dx dx dy dy . du = = If y y( u), where = u( x ), then =), where u = u( x ), then If y = y(u = 2 u du dv dx v v d x d u d x dx du dx v u d u dy dy . du d x d x If y = y(u), where u = u( x ), then = = dx v v2 dx du dx dy dy . du If y = y(u), where u = u( x ), then = dx du dx dy dy . du f ( x ) dx f( (x x)) If y = y(u), where u = u , then = dx du dx

ln x

ke kx = ky f(x)e f(x)

Exponential functions y y1 m= 2 e 2.7183 x 2 x1 constant (x1, y1) is the exponential


Ne gat ive gra die nt

(x2, y2)

Quadratic functions y = ax2 + bx + c

Graph of y = e x showing exponential growth

Graph of y = e x showing exponential decay

Integration

Maths for Economics


PRINCIPLES AND FORMULAE
A lifeline for economics students

k, (any) constant c

kx + c
2

x2

x +c 2 x3 +c 3

(1) b2 4 ac < 0; Total cost functions

(2) b2 4 ac = 0;

(3) b2 4 ac > 0

x n, (n = 1) x = 1/x e e kx
x 1

ln x + c e +c
x

x n+1 +c n+1

TC = a + bq cq2 + dq3

Inverse functions

y = a/x = ax1

www.studyingeconomics.ac.uk
q = a/p = ap1

e kx +c k

Economics Network

www.economicsnetwork.ac.uk

www.mathcentre.ac.uk

+ and + gives + and + gives + and gives and gives + First: Second: Third:

When multiplying or dividing positive and negative numbers, the sign of the result is given by: e.g. 6 x 3 = 18; e.g. (6) x 3 = 18 e.g. 6 x (3) = 18 e.g. (6) x (3) = 18

Arithmetic

Algebra
a(b + c) = ab + ac (a + b)(a b) = Removing brackets (a + b)(c + d) = ac + ad + bc + bd (a + b)2 = a2 + b2 + 2ab; a2 b2 a(b c) = ab ac

21 7 = 3 (21) 7 = 3 21 (7) = 3 (21) (7) = 3

(a - b)2 = a2 + b2 2ab

Formula for solving a quadratic equation Order of calculation brackets x and + and

If ax2 + bx + c = 0, then x =
Laws of indices

Fractions

Fraction =

denominator

numerator

To add or subtract two fractions, first rewrite each fraction so that they have the same denominator. Then, the numerators are added or subtracted as appropriate and the result is divided by the common denominator: e.g. Adding and subtracting fractions
15 3 5 fractions Multiplying = 4 3 716 1115 77 31 To + multiply = + two = fractions, multiply their numerators and 5 4 20 20 20 4 3 16 15 31 + = + = 5 4 20 20 20

Logarithms to base e, denoted loge, or alternatively ln, are called natural logarithms. The letter e stands for the exponential constant, which is approximately 2.7183.

n 5means 1 + 2 + 3 n i n +x 42 + 52 x x means +. x.2 x x1 +x .+ 2 2 2 1 This notation is often in statistical calculations. The n 1 used 3 + 4 + 52 i i means m 1/ n n m/ n n m 0 i =1 2 n 1 i = i 1 + 2 + 3 x n x x x + + . . . + x = = a = m a = a a = a a =1 1 i =1i =i 1 2x + x + n. . . + x xi x= = i =1 1 n2 x n and mean the n quantities, 1 iof =n 2 xn is n n1, x2, ... a x = n n= x2 n n =1 ( x i x ) i x 5 n x var( = = i =1 i x 2 ) x x x + + . . . + i i =1 n 1 n 22 2 n2 2 Laws of logarithms n x = =x n3 n means i2 12 +2 + 4 5n 2 x x x2 + + + ... + +x x ii = x )2 1 n( n 2 i n1 n1 i 2 1 = =12 ix i x = = i = x x ( ) y 2 x n n 2 = = var( ) x i n x i y = log b x means b = x and b is called the base 2 i =1 x )i =1 (xi= var( x ) = x 2 1 n 1x i i= n ni =
23 2 2 2 2 2

a m a n = a m+n

am a
n

b b2 4 ac 2a

= am n

( a m )n = a mn

x n x i + x . . xn i . through 2 all integers (whole numbers) from Note that 1x iruns i= 1x + x i2 . . . 3 xn 1 1 for instance So, 1 to n. i = x i means x1 + x 2 + x 3 i =1 n i =1 n 3 x i 3 x means +x i =1 x xx 3 1.+ i x + i2 x1 . . x x x12 + x 3x 3 5 x 1 2+ n + i= i 1means i = x means x 2 2 + x 3 12 + 2 2 + 3 2 + 4 2 + 5 2 i i =1 1i means i =1 3 n i =1 Example 5 2 x i 3means 2 xi x 21 + x 22 + x 23 2 5 1 + 2 + + 4 + 5 =1 means x4 ++ x2 +2 x3 2 2 i 5 imeans 2x 2 2 3 2 12 i i= 1 + + 2 3 + 5 2 i1 2 2 2 ii =1means =1 1 +2 +n 3 +4 + 5+ x + . . . + x i means x1 i =1 i =1 x i 2 n
n i =1 5

The Greek capital letter sigma is used as an abbreviation n values: x1, x2, ... xn and we for a sum. Suppose we have x1 + x 2 . . . xn wish to add them together. The sum n x + x2 . . . xn x1 + 1 x2 x. .+ . xn is written x i 1 x2 . . . xn
n i =1

Sigma Notation

x=

e.g. log 10 2 = 0.3010

means 100.3010 = 2.000 to 4 sig figures

ln AB = ln A + ln B ; ln

then multiply their denominators: e.g.


3 2 3 3 9 = 3 5 = 15 5 2 45 3 3 =16 15 10 31 7+ 11= 77 + = 5 4 20 20 20

A = ln A ln B ; ln A n = n ln A B

Dividing 3 2 3 fractions 3 9 multiply: e.g.


3 2 3 = 5 3 5

3 5 = 15 = 5 divide 3 7 5 11 2= 77 10 To two fractions, invert the second and then 3 9 = 2 10

To convert a fraction into a percentage, multiply by 100 5 and express result as a5 percentage. An example is: as a the percentage is 100 = 62.5% 8 8 5 5 as a percentage is 100 = 62.5% 8 8
1 1 1 3 = 10% = 25% = 50% = 75% 10 4 2 4 1 1 1 3 = 10% = 25% = 50% way = 75% Ratios are simply an alternative 10 4 2 4 of expressing fractions. Consider dividing 200 between two people in the ratio of 3:2. This means that for every 3 the first person gets, the second person gets 2. So the first gets 3/5 of the total (i.e. 120) and the second gets 2/5 (i.e. 80).

Proportion and Percentage

= x var( )=n n The variance is n nx 2x ) 2 (x ) =n var( n n sd x x x ( ) x x x + + . . . + ii in = 11 n 22 x= = i i= = 1 =2 2 i =1 x var( x ) in n i =1 x i =1 ( x i x ) n n n x = = x2 var( ) sd(x ) = var(x ) n n x sd(x ) = var( ) sd(x ) = var(x ) i.e. the mean the squares minus x 2 the square of the mean (x ) 2 n n of i x x )(= = i =1 i x 2 var(sd x ) =i =1 var(x ) n var(x ) n sd(x ) = The standard deviation (sd) is the square root of the variance:
Note that the standard deviation is measured in the same units as x.

sd(x ) = var(x )

The Greek Alphabet


alpha beta delta zeta gamma epsilon theta iota kappa nu xi pi lambda sigma tau chi phi rho

Some common conversions are

1 + x + x2 + x3 + x4 + 1 + x + x2 + x3 + + xk (where 0 < x < 1 )

Series (e.g. for discounting)

= (1x k+1 ) /(1x )

= 1/(1x )

mu

upsilon psi

Generally, to split a quantity in the ratio m : n, the quantity is divided into m/(m + n) and n/(m + n) of the total.

eta

omicron

omega