AZHAR ABBAS (NAWAB)

CHAPTER NO 1

DEFINITIONS:

ARITHMETRIC:
Arithmetic is the oldest and basic branch of Mathematics. It
consist of the study of numbers especially the properties of the
traditional operation between them.

Basic Arithmetic Operations:

There are four basic arithmetic operations in math for all real
numbers are:

a) ADDITION
b) SUBSTRACTION
c) MULTIPLICATION
d) DIVISION

THE NUMBER LINE:

The number line is a horizontal line on which every point
represents a real number.

SOLVING EQUATIONS:
The solution of an equation is simply the value or values of the
unknown(s) for which the left-hand side(LHS) of the equation is
equal to the right-hand side(RHS).

FOR EXAMPLE:
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X+4=10

X=10​ – 4

X=6

SIMPLE INEQUALITIES:
1) EQUALITY
2) INEQUALITY

EQUALITY:
An equation is an equality .it states that the expression on the
LHS of the = sign is equal to the expression on the LHS.
FOR EXAMPLE:
5 = 5 or 5x = 5x are equations

INEQUALITY:
An inequality is a statement in which the expression on the LHS is
either greater than (denoted by the symbol >) or less than (denoted
by the symbol <) the expression on the RHS.

For Example:
5 > 3 OR 5x > 5x

are inequalities which read 5 is greater than 3

AZHAR ABBAS (NAWAB)

CHAPTER NO 2

THE STRAIGHT LINE:

The straight line is one of the simplest mathematical fun
ction: it is easy to manipulate and to graph.

OR
The straight line may be defined by two properties:

SLOPE;
The change in hight (∆y)divided by the corresponding
increase in horizontal distance(∆x).

Slope =

SLOPE, usually represented by the symbol m.

NOTE:
When

X=0 the slope is parallel to x-axis

X=infinity, the slope is parallel to y-axis

VERTICAL INTERCEPT:
VERTICAL INTERCEPT, the point at which the line crosses
the y-axis, usually represented by the symbol c.

HORIZONTAL INTERCEPT:
HORIZONTALL INTERCEPT, the point at which the line
crosses the x-axis, also usually represented by the
symbol c.
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THE EQUATION OF THE LINE:

The formula which calculates the y-coordinates for
any given x-values on the straight line is called THE
EQUATION OF THE LINE.

Y = mx + c

Where m is slope and c is the symbol representing the intercept on the y-axis.

ECONOMIC MODELS:
Economics is a social science which studies how individual
within an economy make economic decisions on the allocation,
distribution and utilization of resources in order to satisfy their
needs and wants.

TYPES OF ECONOMIC:
There are two types of economic models:

i) Microeconomics
ii) Macroeconomics

MICRO ECONOMICS:
This studies the economic decision of individual households
and firms.

It also analyses how governments can affect these decisions

through the use of taxes and how individual markets operate.

FOR EXAMPLE:
Individual household demand and individual firm supply goo X.

MACRO ECONOMICS:
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This studies the economy as a whole. It studies the aggregate

of all economic decisions.

FOR EXAMPLE:
Total planned consumption, total planned savings and
total planned investment in the economy.

CIRCULAR FLOW:
Circular flow assumes that the economy is composed of:

i) Three economic agents

ii) Three markets

THREE ECONOMIC AGENTS:

i) Households(consumers)
ii) Firms(producers)
iii) The government

THREE MARKETS:
i) The Goods Market
ii) The Labour Market
iii) The Money Market

THE DEMAND FUNCTION:

OR
LAW OF DEMAND:
A basic economic hypothesis which states that there is a
negative relationship between quantity demanded and
price,
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that is, when the price of a good increases, the quantity

demanded will decrease, all other variables remaining
constant.

Q = f (p)
THE SUPPLY FUNCTION:
OR
LAW OF SUPPLY:
A basic economic hypothesis which states that
there is a positive relationship between
quantity supplied and price,
When the price of good increases, the quantity
supplied will also increase, all other variables
remaining constant.

P = h (Q)
TOTAL COST (TC):
TC = FC + VC
FIXED COST(FC):
The cost that are fixed irrespective of the level of output

e.g. :
Rent on premises

VARIABLE COST (VC):

The cost which vary with the level of output.

e.g. :
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Each extra unit of a good producer will require additional

units of raw materials, labour, etc.

ELASTICITY:
The ratio of the percentage change in the quantity
demanded (or supplied) to a percentage change in an
economic variable, such as price income, etc is called
ELASTICITY.

PRICE ELASTICITY OF DEMAND:

Point elasticity of demand measures the responsiveness
(sensitivity) of a quantity demanded to changes in the
goods own price.

PRICE ELASTICTY OF DEMAND Ed = .

POINT ELASTICITY:
Point elasticity measures elasticity at a point on the
demand function.

P = a - bQ

ATC ELASTICITY:
Arc elasticity measures over an interval on the demand
function.