ECN 2311

Mathematics for Economics

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 UNIT 2

Functions and limits

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 Metric spaces
• In a metric space, attention is focused on the spatial
relationships between elements.
• Distance is a notion that we will find useful in theory building.
• The notion of metric is the generalization of the notion of
distance between two real numbers.
• A metric space is a set X on which is defined a measure of
distance between the elements.
• The distance should be positive, symmetric and the shortest
route between two distinct elements should be the direct
route.

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 Sequence
• A sequence is a set of terms (or numbers) arranged in a definite order.
• The arrangement of numbers could either be in order of descending or
ascending order
Examples 1
(i) 3, 7, 11, 15, . . .
• In this sequence each term is obtained by adding 4 to the previous term. So
the next term would be 19.
(ii) 4, 9, 16, 25, . . .
• This sequence can be rewritten as 22 , 32 , 42 , 52 , … The next term is 62 or
36.

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• The dots(. . .) indicate that the sequence continues indefinitely – it is
an infinite sequence.
• A sequence such as 3, 6, 9, 12 (stopping after a finite number of
terms) is a finite sequence.
• Now consider the following:
• Let 𝑦 = + 4 + 𝑥. When 𝑥 = 0, 𝑦 = 2 and when 𝑥 = 1, 𝑦 =
+ 5, and so on.
1
• This represents a sequence of value. Similarly, 𝑦𝑛 = , where 𝑛 =
1+𝑛
1,2,3,4,5, … implies that 𝑦1 , 𝑦2 , 𝑦3 , … , 𝑦𝑛 is also a sequence.

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 Limits
• Consider a function 𝑓(𝑥) where 𝑥 is the independent (exogenous)
variable.
• We define the limit of the function as the finite real number that the
dependent (endogenous) variable, let us call it 𝑦, approaches as the
independent variable approaches a constant, say 𝑎.
• Mathematically, this is written as follows:
lim 𝑓 𝑥 = 𝐿
𝑥→𝑎
• Provided we can make 𝑓(𝑥) as close to 𝐿 as we want for all
𝑥 sufficiently close to a, from both sides, without actually letting 𝑥 be
𝑎.

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• The definition above simply states that as 𝑥 approaches 𝑎, 𝑓(𝑥)
approaches 𝐿, which in this case is the limit.
• When finding the limit of a function, our presentation might suggest
that 𝑥 = 𝑎.
• In truth, 𝑥 is not equal to 𝑎. The correct way to put it is to say that the
difference between 𝑥 and 𝑎 is so small such that 𝑥 is close to 𝑎 but
not necessarily equal to 𝑎.
• Mathematically, this is stated as follows:
𝑥−𝑎 =𝜀
• Where 𝜀 is the Greek letter epsilon, which signifies a very small
number. Graphing functions is one approach that is used to find limits
of functions.

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• Limits could be right-handed or left-handed.
• Right-handed limit:
• We say
lim 𝑓 𝑥 = 𝐿
𝑥→𝑎+
• provided we can make 𝑓(𝑥) as close to 𝐿 as we want for all 𝑥 sufficiently
close to a and 𝑥 > 𝑎 without actually letting 𝑥 be 𝑎.
• Left-handed limit:
• We say
lim− 𝑓 𝑥 = 𝐿
𝑥→𝑎
• provided we can make 𝑓(𝑥) as close to 𝐿 as we want for all 𝑥 sufficiently
close to a and 𝑥 < 𝑎 without actually letting 𝑥 be 𝑎.
• Thus for a limit to exist,
lim− 𝑓 𝑥 = lim+ 𝑓 𝑥
𝑥→𝑎 𝑥→𝑎

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Rules of limits
1. lim 𝑘 = 𝑘
𝑥→𝑎
2. lim 𝑥 𝑛 = 𝑎𝑛
𝑥→𝑎
3. lim 𝑘𝑓(𝑥) = 𝑘 lim 𝑓(𝑥)
𝑥→𝑎 𝑥→𝑎
4. lim 𝑓 𝑥 ± 𝑔(𝑥) = lim 𝑓 𝑥 ± lim 𝑔(𝑥)
𝑥→𝑎 𝑥→𝑎 𝑥→𝑎
5. lim 𝑓 𝑥 × 𝑔(𝑥) = lim 𝑓 𝑥 × lim 𝑔(𝑥)
𝑥→𝑎 𝑥→𝑎 𝑥→𝑎
6. lim 𝑓 𝑥 ÷ 𝑔(𝑥) = lim 𝑓 𝑥 ÷ lim 𝑔(𝑥)
𝑥→𝑎 𝑥→𝑎 𝑥→𝑎
𝑛
7. lim 𝑓(𝑥) 𝑛 = lim 𝑓(𝑥)
𝑥→𝑎 𝑥→𝑎

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 In-class exercise
• Find the limit of the following
3𝑥 2 −5𝑥
a) lim
𝑥→4 𝑥+6
𝑥−7
b) lim 2
𝑥→−7 𝑥 −49

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 Solution
3𝑥 2 −5𝑥 lim 3𝑥 2 −lim 5𝑥 3(42 )−5(40 48−20
𝑥→4 𝑥→4
a) lim = = = = 2.8
𝑥→4 𝑥+6 lim 𝑥+lim 6
𝑥→4 𝑥→4
4+6 10
𝑥−7 𝑥−7 1
b) lim 2 = lim = lim ; Limit does not exist
𝑥→−7 𝑥 −49 𝑥→−7 (𝑥+7)(𝑥−7) 𝑥→−7 (𝑥+7)
because the denominator goes to zero as 𝑥 goes to −7.

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Continuity of a function
• In economic analysis, continuity of functions together with the
existence of their limits becomes useful for forecasting and prediction
of certain outcomes.
• Imagine, we are dealing with a discontinuous production function,
what would be the implications on average and marginal product
curves?
• A continuous function therefore is one that has no breaks, jump or
space in its curve.

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• Determining if a function is continuous at a given point
• A function 𝑓(𝑥) is continuous at a point 𝑥 = 𝑎 if for any positive value 𝐸,
however small, there exists a positive number 𝜕 such that:
𝑓 𝑥 − 𝑓(𝑎) < 𝐸, 𝑃𝑟𝑜𝑣𝑖𝑑𝑒𝑑 𝑡ℎ𝑎𝑡 𝑥 − 𝑎 < 𝜕
• In other words, 𝑓 𝑥 → 𝑓 𝑎 𝑎𝑠 𝑥 → 𝑎, where 𝑥 → 𝑎 either from the left or
from the right.
• If the two one sided limits are unequal, the function is discontinuous at 𝑥 = 𝑎
• The following conditions must hold for the function 𝑓 𝑥 to be
continuous at point 𝑎:
i. f(x) is defined, i.e, it exists at x = a
ii. The limit exists, i.e, lim 𝑓 𝑥 does exist.
𝑥→𝑎
iii. The lim 𝑓 𝑥 = 𝑓(𝑎)
𝑥→𝑎

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 End of Lecture 2

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