SETS, FUNCTIONS AND EQUATIONS

Business Mathematics
 CONTENTS

Sets
Functions
Equations
Inequalities
Common tasks in exercises
Choice of symbols
Relevance in the business literature (example)
Further study

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 SETS

A set is a collection of objects.

The objects are the set’s elements or members.

Notation
𝑆 = 𝑒1 , 𝑒2 , … where 𝑆 is the set and 𝑒1 , 𝑒2 , … are its elements.
𝑒1 ∈ 𝑆 and 𝑒2 ∈ 𝑆, where ∈ means “is an element of” while ∉ means “is not an
element of”.

Examples
Prime numbers smaller than 10: 𝑃 = 2, 3, 5, 7
Bachelor programs SBE: 𝐵 = 𝐵𝐾, 𝐼𝐵𝐴, 𝐸𝐵𝐸, 𝐸𝑂𝑅, 𝐸𝐷𝑆
EU countries: 𝐶 = 𝐴𝑇, 𝐵𝐸, 𝐶𝑌, 𝐷𝐸, …

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 SETS

Special sets
▪ ∅, the empty set
▪ ℕ, the (infinite) set of all natural numbers
▪ sometimes we write ℕ0 = 0,1,2, … and ℕ+ = 1,2, …
▪ ℤ, the set of all integers (positive, negative, zero)
▪ ℝ, the set of all real numbers (including fractions, roots, 𝜋, etc.)

Intervals of elements
▪ open, 𝐴 = 4,11 (does not include 4 and 11)
▪ closed, 𝐴 = 4,11 (includes 4 and 11)
▪ semi-open, 𝐴 = [4,11) (includes 4 but not 11) or 𝐴 = 4,11 (includes 11 but
not 4)

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 SETS

Notation: 𝑥 ∈ 𝐵 𝐴 (or 𝑥 ∈ 𝐵: 𝐴 ) is the set of all 𝑥 in B that satisfy condition 𝐴

Examples
▪ 𝑥 ∈ ℝ 𝑥 > 𝑎 = 𝑎, ∞
▪ 𝑥 ∈ ℝ 𝑎 ≤ 𝑥 ≤ 𝑏 = 𝑥 𝑥 ≥ 𝑎, 𝑥 ≤ 𝑏 = 𝑎, 𝑏
▪ 𝑥 ∈ ℝ −∞ < 𝑥 < ∞ = −∞, ∞ = ℝ

More involved examples 𝑥, 𝑦 ∈ 𝐴 × 𝐵 means

▪ 𝑥, 𝑦 ∈ ℝ × ℝ 𝑥 > 𝑦 + 2 contains 5,1 but not 1,5 that 𝑥 ∈ 𝐴 and 𝑦 ∈ 𝐵
▪ 𝑥, 𝑦 ∈ ℝ2 𝑥 > 𝑦, 𝑦 ≤ 0 contains 5, −1 but not 5,1

Take care: 𝑥, 𝑦 ∈ 𝐴2 means

▪ 1,5 can indicate either the interval or the pair of numbers! that 𝑥 ∈ 𝐴 and 𝑦 ∈ 𝐴
(can also be written as
𝑥, 𝑦 ∈ 𝐴)

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 OPERATIONS ON SETS

Operations with sets: Let 𝐴 = 1,2,3 and 𝐵 = 3,4,5

The union (∪) of 𝐴 and 𝐵: 𝐴 ∪ 𝐵 = 𝑥: 𝑥 ∈ 𝐴 𝒐𝒓 𝑥 ∈ 𝐵 = 1,2,3,4,5

The intersection (∩) of 𝐴 and 𝐵: 𝐴 ∩ 𝐵 = 𝑥: 𝑥 ∈ 𝐴 𝒂𝒏𝒅 𝑥 ∈ 𝐵 = 3

The difference (∖) of 𝐴 and 𝐵: 𝐴 ∖ 𝐵 = 𝑥: 𝑥 ∈ 𝐴 𝒃𝒖𝒕 𝑥 ∉ 𝐵 = 1,2

Source: Sydsæter et al, Essential Mathematics for Economic Analysis

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 OPERATIONS ON SETS

Operations with sets: Let 𝐴 = 1,2,3 and 𝐵 = 3,4,5

The union (∪) of 𝐴 and 𝐵: 𝐴 ∪ 𝐵 = 𝑥: 𝑥 ∈ 𝐴 𝒐𝒓 𝑥 ∈ 𝐵 = 1,2,3,4,5

The intersection (∩) of 𝐴 and 𝐵: 𝐴 ∩ 𝐵 = 𝑥: 𝑥 ∈ 𝐴 𝒂𝒏𝒅 𝑥 ∈ 𝐵 = 3

The difference (∖) of 𝐴 and 𝐵: 𝐴 ∖ 𝐵 = 𝑥: 𝑥 ∈ 𝐴 𝒃𝒖𝒕 𝑥 ∉ 𝐵 = 1,2

The Cartesian product (×) of 𝐴 and 𝐵:

𝐴 × 𝐵 = 𝑥, 𝑦 : 𝑥 ∈ 𝐴, 𝑥 ∈ 𝐵
= 1,3 , 1,4 , 1,5 , 2,3 , 2,4 , 2,5 , 3,3 , 3,4 , (3,5)

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 SETS

Subsets
Let 𝐴 = 1,2,3,4,5 and 𝐵 = 3,4,5 and 𝐶 = 4,5,6
Then 𝐵 ⊂ 𝐴, 𝐵 is a subset of 𝐴, but 𝐶 ⊄ 𝐴, 𝐶 is not a subset of 𝐴

A subset is a set (but an element is not a set!)

Mind well:
▪ in 𝐴 ⊂ 𝐵 and C ⊄ 𝐷 there are only sets (𝐴, 𝐵, 𝐶, and 𝐷)
▪ in 𝑎 ∈ 𝐵 and 𝑐 ∉ 𝐷 there are sets (𝐵, 𝐷) and non-sets (𝑎, 𝑐)

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 EXERCISE 1

Find 𝑥 ∈ ℕ+ 3𝑥 ≤ 17

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 EXERCISE 1

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 FUNCTIONS

Let 𝐷 and 𝐸 be sets. A function 𝑓: 𝐷 → 𝐸 is a rule that assigns to every element 𝑥 ∈

𝐷 a unique element f(x) ∈ 𝐸. 𝐷 is called the domain while 𝐸 is the range of 𝑓.

Notation
▪ we write the function as (for instance) 𝑓
▪ we write the value assigned to (for instance) 𝑥 as 𝑓 𝑥

The part in parentheses (here: 𝑥) is the argument of the function

Other notations
▪ 𝑥 is mapped to 𝑓 𝑥 : 𝑥 → 𝑓 𝑥
▪ 𝑦 is the result of 𝑓 𝑥 : 𝑦 = 𝑓 𝑥

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 FUNCTIONS

Example: 𝑓 𝑥 = 1 + 𝑥 2 with domain ℝ

The domain can be restricted

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▪ for reasons of mathematics (example: 𝑓 𝑥 = (𝑥 ≠ 0))
𝑥
▪ for application specific reasons (example: 𝑝 𝑞 = 5 + 𝑞 with 𝑞 ≥ 0)

When not specified, assume the maximum domain

1
▪ 𝑓 𝑥 = 𝑥 + with implicit domain 𝑥 > 0
𝑥

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 FUNCTIONS

The set of function values is the range of 𝑓 𝑥

Range can be restricted

▪ because the function is defined in such a way
▪ Example: 𝑓 𝑥 = 𝑥 2 − 6 has range [−6, ∞)
▪ because the domain is restricted
▪ Example: 𝑓 𝑥 = 3 + 𝑥 with 𝑥 ∈ −10,10 has range −7,13

General notation: 𝑓: 𝑋 → 𝑌 with 𝑋 the domain and 𝑌 the range

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Example: Let 𝑓: ℝ\{0} → ℝ+ be defined as 𝑓 𝑥 =
𝑥

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 FUNCTIONS

Note: The domain need not be ℝ, but one can have two or more dimensions.

For example, a function with two variables 𝑓 𝑥, 𝑦 with domain

▪ ℝ+ × ℝ (𝑥 ∈ ℝ+ and 𝑦 ∈ ℝ)
▪ ℝ2 (both 𝑥, 𝑦 ∈ ℝ)
▪ etc.

Example: 𝑓: ℝ+ × ℝ → ℝ with 𝑓 𝑥, 𝑦 = 𝑦 + log 𝑥

Further: functions with a parameter: 𝑓𝑎 𝑥 (example: 𝑓𝑎 𝑥 = 𝑎𝑥 2 )

Sometimes written as 𝑓 𝑥; 𝑎 or even 𝑓 𝑥, 𝑎

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 FUNCTIONS

𝑥−1
Most functions are denoted by a character (example: 𝑓 𝑥 = , or 𝜙 𝑥 )
𝑥+1

Some functions have a reserved symbol or notation

▪ e.g., sin 𝑥, 𝑥 2 , 𝑥!, log 𝑥, 𝑥 , etc.
They need not be specified, and are assumed to be known

Often written without parentheses, but add parentheses in case of potential ambiguity
▪ log 𝑥 = log 𝑥 , but log 2𝑥 instead of log 2 𝑥

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 FUNCTIONS

We will assume familiarity with

▪ powers (f x = 𝑥 𝑛 ) and exponentials (f x = 𝑎 𝑥 ), as well as f x, 𝑦 = 𝑥 𝑦
▪ roots (f x = 𝑛 𝑥) and logarithms (f 𝑥 = log 𝑎 𝑥)

Further
▪ with the special choice 𝑛 = 2: 2 𝑥 = 𝑥
▪ with the special choice 𝑎 = 10: log10 𝑥 = log 𝑥
▪ with the special choice 𝑎 = 𝑒(= 2.7182 ⋯ ): 𝑒 𝑥 = exp 𝑥 and log 𝑒 𝑥 = ln 𝑥

Euler’s number The natural logarithm

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 FUNCTIONS

For “suitable” values of 𝑥, 𝑦, 𝑎, 𝑏, 𝑚, 𝑛:

1
▪ 𝑥 −𝑚 = 𝑚
𝑥
1
▪ 𝑥 =𝑚𝑥
𝑚

▪ 𝑥 𝑚+𝑛 = 𝑥 𝑚 𝑥 𝑛
▪ 𝑥 𝑚 𝑛 = 𝑥 𝑚𝑛
𝑚
▪ 𝑛 𝑚
𝑥 =𝑥 𝑛

▪ 𝑥𝑦 𝑚 = 𝑥 𝑚 𝑦 𝑚

This should all be well-known to you ...

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 FUNCTIONS

For “suitable” values of 𝑥, 𝑦, 𝑎, 𝑏 :

▪ log 𝑎 𝑥𝑦 = log 𝑎 𝑥 + log 𝑎 𝑦
▪ log 𝑎 𝑥 𝑚 = 𝑚 log 𝑎 𝑥
log 𝑥
▪ log 𝑎 𝑥 = 𝑏
log𝑏 𝑎
ln 𝑥 log 𝑥 ln 𝑥
▪ special cases: log 𝑎 𝑥 = and ln 𝑥 = and log 𝑥 =
ln 𝑎 log 𝑒 ln 10

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 FUNCTIONS

We will often use two classes of functions:

• continuous functions (without jumps)
• smooth functions (without jumps and kinks)

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 EXERCISE 2

Given 𝑓 𝑥 = 𝑥 2 + 𝑥

Find 𝑓 3𝑥

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 EXERCISE 2

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 EXERCISE 3

Given 𝑓 𝑥 = ln 𝑥

Find the (maximum) domain so that the functions takes values in ℝ

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 EXERCISE 3

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 EQUATIONS

An equation is a statement of the form 𝐴 = 𝐵, where 𝐴 and 𝐵 are expressions.

Example
Take for 𝐴 the expression 2𝑥 + 4 and for 𝐵 the expression 18 + 𝑦 to get the
equation 2𝑥 + 4 = 18 + 𝑦.

We use equations ...

▪ ... to assign a value to a variable (example: 𝑝 = 24)
▪ ... to define new variables (example: 𝑆 = 𝑝𝑞)
▪ ... to relate several variables (example: 𝑞 = 20 − 3𝑝)

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 EQUATIONS

Often, we need to ...

... rearrange an equation

1
Example: 2𝑥 + 4 = 18 + 𝑦 ⇒ 𝑥 = 7 + 𝑦
2

... substitute one equation into another equation

𝑆 = 𝑝𝑞
Example: ቊ ⇒ 𝑆 = 𝑝 20 − 3𝑝 = −3𝑝2 + 20𝑝
𝑞 = 20 − 3𝑝

... solve an equation for a variable

Example: 4𝑥 + 3 = 23 ⟺ 𝑥 = 5
Mind the notation:
𝑝 ⇒ 𝑞 for implication (if 𝑝 then 𝑞)
𝑝 ⇔ 𝑞 for equivalence (𝑝 if and only if q)

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 EQUATIONS

Some rules for manipulating equations in scalar variables:

If 𝐴 = 𝐵 and 𝐵 = 𝐶 then 𝐴 = 𝐶
Example: 𝑦 = 3𝑥 + 2 and 𝑦 = −2𝑥 − 4 then 3𝑥 + 2 = −2𝑥 − 4
If 𝐴 = 𝐵 then 𝐴 + 𝐶 = 𝐵 + 𝐶
Example: 𝑥 + 5 = 12, take 𝐶 = −5: 𝑥 + 5 − 5 = 12 − 5, so 𝑥 = 7
If 𝐴 = 𝐵 then 𝑘𝐴 = 𝑘𝐵 (also valid when 𝑘 = 0)
3 3
Example: = 2, take 𝑘 = 𝑥: 𝑥 = 2𝑥, so 3 = 2𝑥 (but check if 𝑥 ≠ 0)
𝑥 𝑥

If 𝐴𝐵 = 0 then 𝐴 = 0 or 𝐵 = 0
Example: 𝑥 − 3 𝑥 + 4 = 0, so 𝑥 − 3 = 0 or 𝑥 + 4 = 0
𝐴
If = 0 then 𝐴 = 0 and 𝐵 ≠ 0
𝐵
𝑥 2 −4
Example: = 0, so 𝑥 = ±2 but 𝑥 ≠ 2
𝑥−2

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 EQUATIONS

Important trick: write an equation as ⋯ × ⋯ = 0

Example 1
𝑥 2 − 2 = 3𝑥 + 2 ⇔
𝑥 2 − 3𝑥 − 4 = 0 ⇔
𝑥+1 𝑥−4 =0⇔
𝑥 = −1⋁𝑥 = 4

Example 2
2 𝑥=𝑥⇔
2 𝑥−𝑥 =0⇔
𝑥 2− 𝑥 =0⇔
𝑥 = 0⋁ 2 − 𝑥 = 0 ⇔
𝑥 = 0⋁ 𝑥 = 2 ⇔
𝑥 = 0⋁𝑥 = 4

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 EQUATIONS

Some pitfalls:

Use “=” only when left=right

don’t write 𝑥 + 3 = 5 = 𝑥 = 2 (but use ⟺)

Don’t lose good solutions

𝑥 3 − 9𝑥 = 0 ⇔ 𝑥 2 − 9 = 0 ⇔ 𝑥 = 3 (two solutions lost)

Don’t introduce wrong solutions

𝑥 = 2𝑥 + 3 ⇔ 𝑥 2 = 2𝑥 + 3 ⇔ 𝑥 2 − 2𝑥 − 3 = 0 ⇔ 𝑥 = 3⋁𝑥 = −1
(one invalid solution)

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 EQUATIONS

Solving can mean ...

... calculating the value of a specified variable

Example: solve for 𝑥: 5𝑥 − 3 = 12 gives 𝑥 = 3

... calculating a specified variable in terms of a parameter

1
Example: if 𝑥 − 𝑎 = 4 with 𝑎 a parameter, solving for 𝑥 gives 𝑥 = 2𝑎 + 8
2

... calculating a set of solutions

Example: if 𝑥 + 𝑦 = 5, solving for 𝑦 gives 𝑦 = 5 − 𝑥

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 EXERCISE 4

Solve for 𝑥: 𝑥 9𝑥 = 12 − 𝑥

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 EXERCISE 4

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 EXERCISE 5

Solve for 𝜇 (and indicate the domain of 𝜃): 𝜇2 = −4𝜃

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 EXERCISE 5

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 INEQUALITIES

An inequality is not an equation

▪ even though you use an “equation editor” to type it

Take care of the rules

If 𝐴 > 𝐵 and 𝐴 > 𝐶 we don’t know anything about how 𝐵 compares to 𝐶
▪ while 𝐴 = 𝐵 and 𝐴 = 𝐶 implies 𝐵 = 𝐶

Be careful about signs

If 𝐴 < 𝐵 we don’t know if 𝑘𝐴 < 𝑘𝐵
▪ for 𝑘 = 2 we have 3 < 4 ⇒ 6 < 8
▪ for 𝑘 = −2 we have 3 < 4 ⇒ −6 > −8

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 INEQUALITIES

Other important symbols:

▪ ≥ “greater than or equal to”
▪ ≤ “less than or equal to”
▪ ≠ “not equal to”
▪ ≈ “approximately equal to”

Mind special rules as well:

▪ e.g., 𝑥 ≠ 𝑦 ≠ 𝑧 ⇏ 𝑥 ≠ 𝑧

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 EXERCISE 6

Solve for 𝑧: 𝑧 2 − 8𝑧 > −15

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 EXERCISE 6

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 COMMON TASKS IN EXERCISES

▪ Solving a system of equations

3𝑥 + 2𝑦 = 5
Example: ቊ
4𝑥 − 3𝑦 = 12

▪ Finding zeros of a function

Example: given 𝑓 𝑥 = 5𝑥 2 + 4𝑥 − 9, find when 𝑓 𝑥 = 0 or 𝑓 ′ 𝑥 = 0

▪ Finding regions where an inequality holds

Example: given 𝑓 𝑥 = 5𝑥 2 + 4𝑥 − 9, find when 𝑓 𝑥 > 0 or 𝑓 ′ 𝑥 ≥ 0

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 CHOICE OF SYMBOLS

It’s (to some extent) a matter of taste

There are conventions, although they differ across disciplines
Example: 𝑝 for price in economics, for probability in statistics

Some useful principles

use one major symbol for “similar” quantities
use subscripts for indicating “of what”
Example: 𝑝𝐴 and 𝑝𝐵 for price of product 𝐴 and 𝐵

Greek letters are an important extension

good to know them, from 𝛼 to Ω Please make a clear
distinction between
And we also use sometimes special fonts 𝑎, 𝛼, 𝑥
such as ℋ and 𝔇 𝑏, 𝛽, 𝐵
etc.

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 CHOICE OF SYMBOLS

We often use “decorated” symbols to indicate something special

Examples
▪ asterisk: the function 𝑓 𝑥 has a minimum point at 𝑥 = 𝑥 ∗
▪ tilde: the solution of 𝑓 𝑥 = 0 is 𝑥 = 𝑥෤
▪ prime: the value of 𝑥 after some event is 𝑥 ′

Some decorations have become a standard, like 𝑓 ′ for derivative

However, these symbols can always mean something different!

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 RELEVANCE IN THE BUSINESS LITERATURE (EXAMPLE)

T. Erdim, An empirical analysis of umbrella branding. Journal of Marketing Research

35:3 (1998), 339-351

“In this article, the author studies the processes by which consumers' quality
perceptions of a brand in a product category are affected by their experience with
the same brand in a different category.”

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 FURTHER STUDY

Sydsæter et al. 6/E 1.1, 2.6, 3.1-3.6, 4.1-4.10

The Greek alphabet (extra pdf)

Tutorial exercises week 1

sets and intervals

functions
domain
exponents
logarithms
equations
inequalities
Greek alphabet

Canvas quizzes 1B

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