Mathematical Methods for Economics

Paper Code: 
24ECO 223
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 
  1. To develop an understanding of preliminary concepts of mathematics used in economics. 
  2. To help the students acquaint with the techniques of differentiation and integration and their uses in economics.
  3. To appraise the students with the techniques of linear programming and game theory and their applications.

 

Course Outcomes: 

Course

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Course Code

Course Title

24ECO 223

Mathematical Methods for Economics

(Theory)

Students will:

CO49: comprehend the basic mathematical concepts and tools and understand their application in economics. 

CO50:  examine the applications of matrices and determinants and input-output analysis in the economic analysis.

CO51:  comprehend the techniques of differential calculus and the cases of constrained and unconstrained optimization and apply them in economic analysis.

CO52: comprehend the concept of integration and its multiple applications in the field of economics.

CO53: find solutions to the Linear Programming Problems using both graphical or simplex method

CO54: contribute effectively in course-specific interaction.

Approach in teaching: Interactive Lectures and Discussions.

 

Learning activities for the students:

Practice Modules and

Assignments.

Class activity, Assignments and Semester end examinations.

 

Unit I: 
Terminology, Concepts and tools
  • Basics of a mathematical model
  • Functions and their types. Demand and supply functions, Cost and revenue functions, Consumption function, IS & LM functions
  •  Multivariate functions-Market equilibria.

 

12.00
Unit II: 
Matrices & Determinants
  • Fundamentals of matrix algebra
  •  properties of determinants
  •  solving equations by inverse matrix method
  •  Crammer’s rule
  •  Application: Input-output analysis.

 

12.00
Unit III: 
Differential Calculus
  • Rules of simple differentiation, higher order derivatives, concavity and convexity, maxima, minima and point of inflection,
  • Partial derivatives
  •  unconstrained and constrained optimization
  •  Use of derivatives in economics

 

12.00
Unit IV: 
Integral Calculus
  • Concept of integration, simple rules of integration, definite integral
  • Application of integration - Consumer’s surplus, producer’s surplus; cost, revenue, demand and consumption/ saving functions.

 

12.00
Unit V: 
Linear Programming
  • Basic Concepts, formulation of LP problem
  • basic feasible solution and optimal solution
  • graphical and simplex methods
  •  concept of primal and dual.
  • Game Theory

 

Essential Readings: 
  1. Chiang, Alpha C. and Wainwright, Kevin, Fundamental Methods of Mathematical Economics, McGraw Hill Education; Fourth Edition, July 2017.
  2. Mehta, B.C. &Madnani, G.M.K., Mathematics for Economists, Sultan Chand and Sons,     New Delhi, 2007
References: 

Suggested Readings:

  1. Allen, R.G.D., Mathematical Analysis for Economists, Trinity Press, 2014.
  2. Dowling, Edward, Mathematical Methods for Business and Economics, Schaum’s Outlines, McGraw Hill Education, 2009.
  3. Yamane, Taro, Mathematics for Economists: An Elementary Survey, Literary Licensing, LLC, 2012.

E Resources:

Journals:

  • Journal of mathematical economics

 

 

Academic Session: 
2024-25
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