Reading Notes

Economics Dr. Sauer

Chapter 2: Straight Lines 2.1 The Straight Line Review as needed. Make sure you can: - plot a straight line from an equation - identify the slope - identify the vertical and horizontal intercepts Notes:

Complete PE 2.2 problems: 1, 2, 4i, 4ii ________________________________________________________________________________ 2.2 Mathematical Modeling A static model is one that is not changing. A dynamic model means change is taking place. A physical model is meant to be an actual representation of the real world. An abstract model is a simplified version of the world. Examples of: Physical, Static Models: Physical, Dynamic Models: Abstract, Static Models: Abstract, Dynamic Models:

A deterministic model means the outcome: A stochastic model means the outcome:

The 4 basic steps for mathematical modeling are 1. 2. 3. 4.

2.3 Applications: Demand, Supply, Cost, Revenue Read through this section to review or familiarize yourself with the terms/concepts. We will work through examples of each in class. Demand:

Supply:

Cost:

Revenue:

2.4 More Mathematics on the Straight Line Review as needed.

2.5 Translations of Linear Functions We will cover in class. 2.6. Elasticity of Demand and Supply Read through this section to review or familiarize yourself with the terms/concepts. We will work through examples of each in class. Price Elasticity of Demand:

Point Elasticity of Demand:

Interpreting the coefficient of price elasticity of demand:

Arc price elasticity of demand:

Price elasticity of supply:

2.7 Budget and Cost Constraints We will cover in class. 2.8 Excel for Linear Functions Skip this section. 2.9 Summary After we work through this chapter in class, review this section and write any notes here.