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Summary, book "Essential Mathematics for Economic

Analysis. ", Chapters Contains: 1 (all), 2 (1-4), 4 (1-10), 5
(1-3), 6 (1-6)
Mathematics for E&BE (Rijksuniversiteit Groningen)

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Midterm Mathematics Summary

Week 36
Chapter 1 Algebra

1.1 The Real Numbers

1,2,3,4 are the natural numbers. The positive (plus zero) and negative integers make up the
integers; are whole numbers, such as -1, 0, 1, 2.
Rational numbers are the numbers that can be written in the form a/b. Rational numbers that can be
written with an finite number of decimals are called finite decimal fractions. Such as ¼=0,25. Not
every rational number can be written as an finite decimal fraction. Some of them are infinitive
decimal fractions. Such as 1/3= 0,3333….
If the decimal fraction is a rational number, then it will always be periodic.
The definition of a real number is an arbitrary infinite decimal fraction.
! You can’t divide by 0. p/0 is not defined for any real number.

1.2 Integer Powers

Some rules:

- An=a*a*a
- A0=1 if a≠0
- An-1=1/An
- Ar*As=Ar+s
- (Ar)s=Ar*s
- (a/b)m=am/bm
Compound interest or any calculation with growth factor:

K*(1±p/100)^t 1±p/100 is called the growth factor for a growth of p%

So it can decrease, but it can also increase.

1.3 Rules of Algebra

aa-1=1 for a≠0

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

Make sure that when you factor you put the biggest common factor outside.
3xy-5x2y3. Then 3xy and 5x2y3 are the terms. 3 and -5 are the numerical expressions.

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1.4 Fractions*
a/b, then a is the numerator and b the denominator.

a*c÷b*c=a÷b
a÷c+b÷c=(a+b)÷c
a+(b÷c)=(a*c+b)÷c
(a÷b)*(c÷d)=(a*c)÷(b*d)

1.5 Fractional Powers

a-1/2= √a if a≥0
√ab= √a* √b
√(a/b)= √a/ √b

a1/n=n √a
a(p/q)=(a1/q)p=(q √a)p

Note:

1. √a+b≠ √a+ √b
2. A square doesn’t have a negative

1.6 Inequalities*
! If two sides of an inequality are multiplied by a negative number the direction of the inequality is
reversed.
To find the solution we use sign diagrams.
When using sign diagrams also note what X isn’t allowed to be. Cause you can’t divide by zero!

1.7 Intervals and Absolute values*

Intervals:

(a,b) Open interval from a to b a <x <b

[a,b] Closed interval from a to b a ≤x ≤b
(a,b] Half open from a to be a <x≤b
[a,b) Half open from a to b a≤x <b

The distance between a and 0 is called the absolute value of a.

[a]=a if a≥0 and is –a is a <0

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Chapter 2 Equations

2.1 How to solve simple equations

To get equivalent equations, do the following on both sides of the equality sign:

1. Add (or substract) the same number

2. Multiply (or divide) by the same number (≠0)

Always notate which number are not allowed

2.2Equations with parameters

Y=ax+b where a and b are the parameters.

2.3 Quadratic Equations

ax2+bx+c=0 where a≠0

−𝑏 ± √𝑏2 − 4𝑎𝑐
𝑥=
2𝑎

1. Check is a≠0 and is b2-4ac is bigger than 0

2.4 Linear Equations in two unknowns

There are two methods:

1. Solve one of the equations for one of the variables in terms of the other and then substitute
2. Multiply so that you can add or substract one of the two variable out of the formula

Week 37
Chapter 4 Functions of one variable

4.1 Introduction
One variable is a function of another if the first variable depends upon the second.

4.2 Basic definitions*

A function of a real variable x with domain D is a rule that assigns a
unique real number to each real number x in D. As x varies the set of
all possible resulting values f(x) is called the range of f.

Y= f(x). Then we call x the independent variable, or the argument of f. Whereas y is called the
dependent variable.

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Domain and Range.

! Always give the domain explicitly.

4.3 Graphs of functions

We call (a,b) an ordered pair, because the order of the pair is important.

4.4 Linear Functions *

Definition: y=ax+b (a and b are constants)

The slope (a) of the straight line is:

a= (y2-y1)/(x2-x1) x1≠x2

Point-point formula of a straight line:

Y-Y1=a*(x-x1)
Use the substitute from the formula above.

Example Sketch in the xy plane the set of all pairs of number (x,y) that satisfy the inequality 2x+y≤4.
Using set notation: {(x,y) : 2x+y≤4}

4.5 Linear Models

Consumption function : C= f(Y) C=a+bY Where the b is called the marginal propensity to
consume.
You can find the equilibrium price and quantity by calculating D=S (demand= supply).

4.6 Quadratic Functions*

F(x)=ax2+bx+c (a,b and c are constants, a≠0)

A. For which values of x is ax2+BX+X=0

B. What are the coordinates of the maximum/minimum point P, also called the vertex of the
parabola?

If a is bigger than 0 => the minimum is at x=-b/2a

If a is smaller than 0 => the maximum is at x=-b/2a

4.7 Polynomials
F(x)=ax3+bx2+cx+d (a,b,c and d are constants; a≠0)

4.8 Power functions*

F(x)=Axr (x is bigger than 0, r and A are constants)

4.9 Exponential Functions*

F(t)=Aat (a and A are positive constants)

Note:
The difference between f(x)=ax and g(x)=xa

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General exponential function with base a>0 is:

F(t)=Aat
Where a is the factor by which f(x) changes when x increases by 1. If a is a=1+p/100 then there is an
increase when a=1-p/100 there is a decrease.

Natural exponential function f(x)=ex

Es*et=es+t ES/ET=es-t (es)t=es*t

Note:
Sometimes the notation exp(u), or even exp u is used instead of eu.

Week 38
Chapter 4 Functions of one variable
4.10 Logarithmic Functions*
Is eu=a, then we call u the natural logarithm of a. And we write u=ln(a)

1. Ln(xy)=Ln(x)+Ln(y)
2. Ln(x/y)=Ln(x)-Ln(y)
3. Ln(xp)=pLn(x)
4. Ln(1)=0 Ln(e)=1
ln(x)
x=e Ln(ex)=x

Chapter 5 Properties of functions

5.1 Shifting Graphs

General rules for shifting y=f(x):

1. If replaced by y=f(X)+c then the graph moves upwards is c>0 (if c<0 it shifts
downwards.
2. If replaced by y=f(x+c) the graph moves to the left if c>0 and to the right if c<0.
3. If replaced by y=cf(x) the graph is sketched vertically is c>0 (and reflected about
the x axis if c<0
4. If replaced by y=f(-X) the graph is reflected about the y axis

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5.2 New functions from old

The function F defined by the formula F(x)=f(x)+g(x) is called the sum of f and g, and we write F=f+g.
In general, if y is a function of u and u is a function of x, then y can be regarded as a function of x. WE
call y a composite function of x. If we composite y=f(u) and u=g(x) we get:

Y=f(g(x))

Here we call g(x) the kernel or the interior function, while f is called the exterior function.
Note:
(f ○ g)(x)= F(g(x)) and (g ○ f)(x) = g(f(x))
Are two very different functions!

5.3 Inverse Functions*

The inverse function is when you use the other variable to express the formula.
To have an inverse a formula has to be one-to-one. For every y value there can only be one unique x
value.

Note:
1/x2+x+c and x2+x+c are note inverses, but reciprocals!

When two functions are the inverse of each other than they are symmetric about the line y=x.

Chapter 6 Differentiation

6.1 Slopes of Curves

At point P the line has the coordinates (a, f(a)). The slope of the tangent to the graph at P is called the
derivate of f(x) at x=a.
F’(a)=the slope of the tangent of the curve y=f(x) at the point (a, f(a))

6.2 Tangents and Derivatives

F’(a)={the limit as h tends to 0} (f(a+h)-f(a))/h

Notation:

F(x)=ax2+bx+c f’(x)=2ax+b

6.3 Increasing and Decreasing Functions*

If f’(x)≥0 for all x in the interval => f is increasing in I

If f’(x)≤0 for all x in the interval => f is decreasing in I

If f’(x)=0 for all x in the interval => f is constant in I

If f’(x) >0 for all x in the interval => f is strictly increasing in I

If f’(x) <0 for all x in the interval => f is strictly decreasing in I

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6.4 Rates of Change

The instantaneous rate of change of f at a is f’(a), but the relative rate of change of f at a is f’(a)/f(a).

6.5 A Dash of Limits

A function has a limit. Writing: limx->a.
Some rules for limits
A lim(x->a) (f(x)±g(x)) = A ± B
B lim(x->a) (f(x)*g(x))= A *B

C lim (x->a) f(x)/g(x) = A/B

D lim (x->a) f(x)r=Ar (Of r is any real number)

6.6 Simple Rules of Differentiation*

(1) F(x)=A => f’(x)=0
(2) Y=A + f’(x) => y’=f’(x)
(3) Y=Af(x) => y’=Af’(x)
(4) F(x)=xa => f’(x)=axa-1

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