Quantitative Methods for Business

Introduction: This paper covers a mixture of Mathematics and Statistics required for students studying business. It is a 15 Point level 200 paper

Assessment details
Assessment: 1 : 1
Test 1 (100 mins) Test 2 (100 mins) Exercises(3) Exam Total 15% 15% 20% (=6, 7 & 7%) 50% 100%

See Coursework schedule for timing of tests and exercises

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Text books
Required:
Bradley & Pattons Essential Mathematics for Economics & Business and Black et al Australasian Business Statistics, Other useful books: Gary Koop (2000 or 05) Analysis of Economic Data (good for topics 5-9) Mike Rosser (2003) Basic Mathematics for Economists. Dowling ET 2nd ed Introduction to Mathematical Economics

Computer program:
Excel (main program for whole paper)
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Expected Prior knowledge

Prerequisites did require some knowledge of introductory Economics and Statistics
If you dont have the required background then you need to put in some extra work If you have never studied Economics before, then acquire an introductory textbook that covers both Macro & Micro topics.

Topic 1: Calculus
Aim to show how calculus can be used in Economics & finance
Study effect of a small change in one variable on other variables: eg. Marginal values Help find optimal or maximum values : optimisation Elasticities or effect of % changes in 1 variable on another

References
Bradley & Patton Chaps 6 & 7 Rosser Chaps 8-10 & 12 Dowling Chaps 3-9 Objectives:
Reminder of basic rules of differentiation Apply to single variable functions Then to multivariable functions Show economic & finance applications

Definition
Differentiation : Concerned with measuring the effect on the value of a function when there is an infinitely small change in the value of a variable in the function
Eg. How much does D or S change as prices drop? Or what is the marginal propensity to consume at various income levels?
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So what have we measured?

The slope of a line at a particular point on the line

This is also known as the first derivative:

Effectively measuring the slope or gradient of Y at a particular value Xi If y = f(x) then

dy y lim dx x0 x
Also shown as f (x)
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Which Functions can be differentiated?

A function can only be differentiated if it is continuous at that point and has an unique tangent at that point
So lines must have no gaps or holes or sharp turning points Many econ & Finance functions are suitable
E.g. TR = 80q 3q2 TC = 2.5q3 13q2 +50q +12

Next look at rules of Differentiation.