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Before we deal with the main theme of ME, let us acquaint ourselves with basic tools often used in economic analysis. Functional relationships Concept of slope Elementary differential calculus
Functional relationships
Any economic quantity, value or rate that varies on its own or due to change in its determents is an economic variable. For ex. Price and quantity demanded Price and quantity supplied Income and expenditure etc.
The function
A function is a mathematical technique of stating the relationship between any two or more variables having cause and effect relationship Bi- variate function Multi- variate function
y = x + x 12
2
Concept of slope
The rate of change in the dependent variable as a result of a change in the independent variable. For ex. Slope of a demand curve, TC curve etc.
Rules of differentiation
dy =0 y=k dx dy n = nkx n 1 y = kx dx dy = f / ( x) g / ( x) y = f ( x) g ( x) dx dy = f ( x).g / ( x) + g ( x). f / ( x) y = f ( x).g ( x) dx f ( x) dy g ( x). f / ( x) f ( x).g / ( x) = y= g ( x) dx [g ( x)]2 dy dy dt = . y = f (t ) and t = f ( x) dx dt dx
Assignment -2
dy find for the following values of y dx 2 3 1. ( x + 4 x)( x 5 x) 2. (4 x 3)
3 3
4x 7x + 3 3. 4 + 2x 4.(2 x 2 3 x + 5) 5
2
5. y = 3 + t
and t = 5 x
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