Chapter 3: Differential Calculus

3.1 Definition of the Derivative

Let us begin the discussion by taking the general form of the function y = f (x
(x). For a function
of the form y = f (x
(x), we can find the average rate of change of y when change in x, ∆x
∆x, is very
small. Let x changes from x0 to x0 + ∆x
∆x, the value of the function y = f (x
(x) changes from f (x0)
to f (x
(x0 + ∆x
∆x). The change in y per unit change in x can be represented by the difference
quotient

, measures the average rate of change of y.

Example 1: Given y = x2, find the average rate of change of y.

Solution f(x0) = x02

f(x0 + ∆x
∆x) = (x
(x0 + ∆x
∆x)2

The next step is to form the difference quotient

Let x0 = 5 and ∆x
∆x = 2; then the average rate of change of y will be 2(5) + 2 = 12. This means
that, on the average, as x changes from 5 to 7, the change in Y is 12 units per unit change in x.

In economics, we are frequently interested in the rate of change of y when ∆x

∆x is very small.

In the above example, if ∆x

∆x is very small, it tends to zero, then the difference quotient

can be reduced to 2x
2x0. That is, as ∆x
∆x approaches zero, 2x
2x0 + ∆x
∆x will approach to 2x
2x0.

Symbolically, as , or it can be expressed by the equation

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This is the derivative of the function y = f (x
(x) = x2, provided that the limit of exists as ∆x
∆x
approaches zero.

Therefore, given a function Y = f (x

(x), the derivative of the function f at x, written f1(x) or
dy/
dy/dx , is defined as

provided the limit exists or let's use h instead of ∆x

, provided the limit exists

Notations: f1(x) is read as "f

"f prime of x"
dy/
dy/dx is read as "the derivative of y with respect to x"

Therefore, for a function y = f (x

(x), the derivative may be denoted by

dy/
dy/dx = f1(x) = .

Note that a derivative is a function (a derived function). The original function is called
primitive function.
function.

The difference quotient measures the average rate of change where as the derivative measures
both the slope and the instantaneous rate of change of the original function f(x) at a given
point.

Steps on how to compute the derivative of f(x) , f1(x).

1. From the difference quotient (Note that ∆x

∆x = h)
2. Simplify the difference quotient algebraically to eliminate the factor h from the
denominator.
3. Let ∆x
∆x or h approaches zero in the simplified difference quotient.
if this limit exists

Example 2. Given f (x
(x) = 2x
2x + 3, find f1(x)

2
Solution:
f1(x) =

Now take the limit of 2.

Example 3: Given f (x
(x) = 2x2 + 3x + 5, find f1(x)

Solution:

Form the difference quotient

This is the simplified expression

Next evaluate the limit of the simplified expression as h approaches zero.

i.e. f1(x) = (4x

(4x + 2h
2h + 3) = 4x
4x + 3

3.2 Geometric Interpretation of the Derivative

In this section we will see the derivative as a measure of the slope of the line tangent to the
curve at a given point.

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 Y

X
Figure 3.1 The Graph of f(x) = x 2

The derivative f1(x) expresses the slope of the tangent to the curve y = f(x) as a function of the
x coordinate of the point of tangency.

To say that f is differentiable at a point means geometrically that the curve y = f(x) has at that
point a unique tangent line which is not parallel to the y – axis.

Therefore, in terms of the derivative, the slope of the function y = f (x

(x) curve at point A
corresponds to the particular derivative value f1(x).
3.3 Differentiability and Continuity

A function is said to be differentiable at x = c if it has a derivative when x = c. If it does not

have a derivative at c, we say it is not differentiable at c.

To be differentiable at a point, a function must

i) be continuous at that point and
ii) have a unique tangent at that point

But continuity is not a sufficient condition for differentiability. In fig. 3.4 (a) and (b)
the functions are continuous at x = 0 but they are not differentiable. The graph of a
differentiable function cannot have a sharp point, a cusp or a break.

f(x) f(x)

x
x

4
 f(x) = / x / f(x) = x2/3
a) corner: no tangent at x = 0 b) cusp: vertical tangent at x = 0

f(x) =

c) The function is undefined at x = 0

Example 1 Show that the function f(x) = /x

/x/ is continuous at x = 0 but not differentiable at x
= 0.
Solution: Check continuity first.

i) f(0) is defined

ii) f(x) exists

iii) f(0) = f(x)

Therefore, f(x) = /x
/x/ is continuous.

To check its differentiability, take the limit of the difference quotient. If the limit exists, it is
differentiable at x = 0. If the limit of the difference quotient does not exist, f(x) is not
differentiable at x = 0

Now check both the right and left side limits.

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Since the right and left side limits are not the same we say f is not differentiable at x = 0. This
shows that continuity does not guarantee differentiability.

Example 2: Show that the function f (x

(x) = /x
/x – 2/ + 1 is continuous at x = 2 but not
differentiable at x = 2.
Solution
The function is continuous at x = 2 because
i) f(x) is defined

ii) f(x) exists

iii) f(2) = f(2) =1

Next show that the limit of the difference quotient does not exist and f is not differentiable at x
=2

is the derivative of the function f (x

(x) = /x
/x-2/ + 1

The next step is to check the left and right side limits.

Since the right and left side limits are not equal the limit of the difference quotient does not
exist. Hence it is not differentiable at x = 2
3.4 Rules of differentiation

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The process of finding the derivative of a function is called differentiation. Up to now we
found the derivative of a function by using the steps discussed in page.

1. Constant Function Rule

The derivative of a constant function y = f(x) = k is zero.

Example 1: Find the derivative of f (x

(x) = 3
Solution:
Solution: f1(x) = 0

2. The power Rule

For any number n, the derivative of a power function f(x) = xn is nxn-1

i.e.

Example 2. Find the derivative of the following functions

a) f(x) = x2

Solution: f1(x) =

b) f(x) = x3

Solution:
Solution: f1(x) =

c)

Solution:
Solution:

d) f(x) = x25

Solution:
Solution:

3. The Sum – Difference Rule

The derivative of a sum (difference) of two functions is the sum (difference) of the individual
derivatives.

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If both f1(x) and g1(x) exist then

Example 3: Find the derivative dy/

dy/dx for each of the following functions.

a) f(x) = x2 + 2x
2x

Solution:
Solution:

But

Therefore

b) f (x
(x) = x3 + x2 + 1

Solution:
Solution:

But

c) f(x) = x5 + x3 + x + 10
Solution:

d) f(x) = x2 – 5x

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Solution:
Solution:

4. The Product Rule

The derivative of the product of two (differentiable) functions is equal to the first function
times the derivative of the second function plus the second function times the derivative of the
first function.

Example 4 Find the derivative of each of the following functions

a) y =(x
=(x + 1) (x
(x2 + 5)

Solution: Let f (x
(x) = x + 1 and g (x
(x) = x2 + 5
Then f1(x) = 1 and g1(x) = 2x
2x

, Substituting the above values we get

b) y = 2x
2x2 (3x
(3x4 – 2)

Solution:
Solution: Let f (x
(x) = 2x
2x2 and g(x
g(x) = 3x
3x4 – 2

c) y = (x
(x2 – 5) (1-2x
(1-2x)

Solution: Let f(x) = x2 – 5 and g (x

(x) = 1 – 2x
2x

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Note that the product rule can be extended to more than two functions. For instance for the
case of three functions,
y = f(x) . g(x) . h(x)

Example 5: Find the derivative of the function

y = (3x
(3x2 + 2) (3x
(3x) (6x + 7)

Solution: Let f (x
(x) = 3x
3x2 + 2, g(x) = 3x
3x and h(x) = 6x
6x + 7

5. The Quotient Rule

The derivative of the quotient of two functions, is

Example 5 y =

Solution: Let f (x) = x + 1 and g(x) = x – 2. Then

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Example 6 y=

Solution:

Example 7

Solution:

3.5 The Chain rule

In this section we develop a rule for differentiating function of one variable, which in turn is a
function of a second variable.

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Suppose y is a differentiable function of u and u is a differentiable function of x. Then y can
be regarded as a function of x and the derivative of y with respect to x is the derivative of y
with respect to u times the derivative of u with respect to x. That is,

Example 1 Find the if y = u2 + 1 and u = 3x

3x –2

Solution: First find

(by power rule)

Then find

Therefore,

Since you are thinking of y as function of x, it is more natural to express as a function of

x. Substituting the value of u, we get.

Example 2: Find if y = u – 5, where u = x3

Solution:

Example 3: Find if y = (2x

(2x – 5)10

Solution:

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The chain rule is very useful to differentiate such kind of functions. Note that the dy/
dy/dx can
be found by multiplying 2x
2x – 5 ten times. But that will be a tedious process.

The first step is to take the function inside the bracket as one function, say u and apply the
chain rule.

Let 2x – 5 = u, then y = u10

Substituting the value of u, 2x – 5, we get

3.6 Inverse Function Rule

This rule is applicable if the function has an inverse. The function f will have an inverse
function, written a x = f-1(y), if there is a one-to –one mapping (for monotonic functions).

Given a function f(x), if x1 > x2 and f(x1) > f(x2) then the function f is called an increasing or
monotonically increasing function. If x1 > x2 and f(x1) < f(x2), then the function is said to be a
decreasing (or monotonically decreasing) function. In both cases an inverse function exists.

The rule of differentiation is

This means that the derivative of the inverse function is the reciprocal of the derivative of the
original function.

Example 1 Given y = 3x
3x + 5 , find dx/
dx/dy
Solution:
Since the function is a monotonic function (its slope is positive) an inverse function exists.
Hence the derivative of the inverse function is

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Example 2 Given y = x3 + x; find dx/
dx/dy
Solution:
Solution:

First check whether an inverse function exists This value is greater than zero

for any value of x. That is, it is a monotonically increasing function and an inverse function
exists.

Note that the inverse function rule is strictly speaking applicable only when the function
involved is a one-to-one mapping.

7. Implicit function Rule

Functions of the form y = ƒ(x) express the dependent variable y explicitly in terms of the
independent variable x and are called explicit functions. Whereas functions of the form ƒ (x,
y) =0 do not express y in terms of x. These functions are referred to as implicit functions. If
the implicit function ƒ(x, y) = 0 exists, and the first order partial derivative of the function on
with respect to y is different from zero (ƒ y 0), then the total differential

Rearranging these terms,

dy =  f x , where ƒ =  ( f ( x, y )
dx fy x
x
f ( x, y )
ƒy =
y
Example
1. Given the function ƒ (x, y) = x 2 + y 2 - 9 = 0, find dy dx we should partially differentiate

the function with respect to x and with respect to y, and then determine dy dx .
And
 2x  x
Thus, dy dx = = y
2y

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8. Logarithm and Exponential Function Rules
a. Logarithmic function rule
2
If we have two numbers 8 and 64 that can be related with each other by the equation 8 = 64
the exponent 2 can be expressed as the logarithm of 64 to the base 8. This means.

Log648 = 2. In general, if y = a x , then log y a = x where a >0 and a 1

In logarithmic application two numbers are mainly selected as a base. These numbers are 10
and e. If the base is 10, then the logarithmic is referred to as common logarithm. But if we use
e as a base, e then the logarithm is known as natural logarithm.
Natural logarithmic function rule
Given the function ƒ(x) =  n 9( x ) = loge 9( x ) where ƒ(x) and (x) are differentiable, and
1
(x) 0, = [ ]
g ( x)
6
Example If y =  n 6 x  7 , then dy dx =
6x  7
Logarithmic function of base a
Given the function f(x) = log , when f(x) and g (x) are differentiable, and g(x) 0,
dy = ƒ' (x) = 1 [g' (x)] 1
dx g ( x) n a
Example
1. If f(x) = x 3 log6 x , then ƒ' (x) = 3x 2  og6 x + x 3 = x 2 (3 og x + )
6

x
ƒ' (x)= 3x 2 og 6 +

2. If ƒ(x) =, Log then ƒ' (x) = 6x+2

(3x2+2x) ln3
b) Exponential Function Rule
The function y = a x where a is constant and a > 0, a 1 is known as exponential function to
base a. If the base is e, the function is referred to as natural exponential function.
y = e x , where e= 2.71828
In economics, natural exponential functions are particularly useful for analyzing the growth
rates of different variables.
Natural exponential function rule
If ƒ(x) = e g ( x ) where ƒ (x) and g(x) are differentiable, then ƒ' (x) = e g ( x ) g' (x).

dy
Given the function y =ex, then = ex.
dx
Example
1. If ƒ(x) = 5e , then ƒ' (x) = -10x e
5x
e
2. If ƒ (x) = 5 x , then ƒ' (x)
e 1

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 Exponential Function Rule for Base a
Given the function f(x) = a g(x) Where g(x) and ƒ(x) are differentiable, a>0, a 1,
Ƒ' (x) = a g(x) n a
Example.1. ƒ(x) = a 3 x , then ƒ' (x) = a 3 x 3 n a
Ƒ' (x) = 3a 3 x n a

3.8 Higher Order Derivatives

In our previous discussion we have considered only the first derivative of a function
. In this section we will see the concept of second derivative, and derivatives of
even high orders.

The derivative of a function is the first derivative. The derivative of the first derivative is
called the second derivative.
derivative. The second derivative of the function f denoted by or

indicates that has been differentiated with respect to x twice.

If exists for all x values in the domain, the function is said to be twice
differentiable; if, in addition is continuous, the function is said to be twice
continuously differentiable.

Example1: Find the first and second derivative of the function f (x

(x) =3x
=3x2-5x
-5x+15

Solution:
Solution:
The first derivative of the function is f’(x) = 6x
6x-5
And the second derivative is =6

Since is a measure of the rate of change of the function f, is also the measure of
the rate of change of the first derivative,

The second derivative can be differentiated with respect to x to produce a third derivative and
so on.
Chapter 4 Integration

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 Integration is the reverse of differentiation. Thus integrating a function means finding another
function when it is differentiated gives the primitive function.

Indefinite Integrals
Given the derivative of the function ƒ' (x), we can find the primitive function f(x) using the
method of integration if we have appropriate information to definitive the arbitrary constant.
The standard notation which is used to denote the integration of ƒ' (x) is
ƒ( x) =

Where ƒ (x) is the integral of a function ƒ'(x), the sign is referred to as the sign of
integration. The ‘indicates that ƒ(x) shall be equal to ƒ' (x) when it is differentiated with
respect to x. The function ƒ' (x) is known as the integrand, i.e. the function to be integrated.
As you remember from the process of differentiation constant numbers disappear when a
function is differentiated. As a result, we cannot know the constant that should appear in an
integrated function if additional information is not available. Thus, we ought to incorporate a
constant of integration represented by C. The integral
is known as indefinite integral of ƒ'(x) as it does not have definite numerical
value. This value varies with the value of the independent variable x.

Rules of Integration
As you know integration is the reverse of differentiation. As a result, the rules of integration
are the reverse of that of differentiation. They are explained as follows

1. The power rule

Given the derivative function ƒ'(x) = x n , according of the power function rule the primitive
function
ƒ( x) =  n 1
ƒ(x) =  ax n dx = ax + C
n 1

When a and n are parameters and n -1

Example
3 x 4 1  C
1. If ƒ'(x) = 3x 4 , ƒ(x) =  3x 4 =
4 1
3x 5
= C
5
5 x 0 1
2. If ƒ’(x) = 5, then ƒ(x) =  5dx = + C = 5x+C
0 1
2. Exponential Rule
Given the function ƒ'(x) = e x , the primitive function ƒ(x) is
ƒ( x) =  e x dx  e x  C
3. Logarithmic function Rule

17
 1
Given the derivative of the function ƒ' (x) = , the original function
x
1
ƒ(x) =  dx  n /x/ + c , x 0.
x
4. The Integral of sum
The integral of sum of functions is the sum of the integral of those functions. Given the two
derivative functions ƒ' (x) and g '(x), then
ƒ(x) = [ ƒ'(x) + g'(x) ] =  ƒ' (x) +  g'(x)
= ƒ (x) + g(x) + C
Example
Find  (2 x 2 + 3x+2)
 (2 x 2 +3x+2) =  2 x 2 dx   3 xdx   2dx
2 x 3  c1 3x 2  c2 ) 2 x  c3
= + +
3 2 1
=
In the final answer the arbitrary constants of integration can always be combined in single
arbitrary constants.

5. The Integral of a multiple

The integral of the product of a constant and a function is equal to the product of the constant
and the integral of the function, that is
ƒ' (x) =c ƒ'(x) where c is constant.

3 x 4 1
Example +C
4 1

Techniques of Integration
As you know from your Quantitative method for economists I study, there are different
derivative functions whose primitive functions cannot be obtained using one of the above
rules of integration. Thus, certain techniques of integration have been developed for
integrating these functions. Some of these are explained below.

a) Integration by Substitution
Given the derivative function ƒ' (x) and x = g (u) be a differentiable function then

Example
a.  2 x( x 2  5)3 dx
du u 31
Let u= x 2 +5, then = 2x, .Therefore  u 3 = +c
dx 3 1
= u4 + C

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 = (x 2 +5) 4 + C

b. =
du
Let u= 2x 2 - 6x +1 so that = 4x – 6, u'=2(2x-3)
dx

du = (2x - 3)
2
2x  3 du 1 du
Therefore,  ( )dx   1 
2x2  6x  1 2 u= 2 u
1 1
1 U
1
2
= 1 2  U du = 2
2 C
1
2

= U (1/2) +C
Substituting 2x 2 -6x+1 in place of u gives as
2x  3
( ) = +C
2 x2  6x  1

b. Integration by Parts
It is a method that enables us to integrate certain products ƒ'(x) g' (x). It is a restatement of the
product rule for differentiation. The formula for this method is
 f (x) .g (x) = ƒ(x) G(x) -  ƒ'(x) G(x) , where G(x)=  g(x) .

Example
1. Evaluate  x( x+1) 12
3 3
1 x ( x  1) 2
( x  1) 2

 x( x  1) 2 = -  dx
3 3
2 2
5
2 3 ( x  1) 2
= ( x  1) 2 x- 2 3 5 +C
3 2
3 2 2 5
= 2 3 ( x  1) 2 - ( )( x  1) 2 + C
3 5
3 5
= 2 3 x( x  1) 2 - 415 ( x  1) 2 + C

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