Mathematical methods for Economics

Paper Code: 
ECO 123
Credits: 
4
Contact Hours: 
60.00
Objective: 

To understand the application of mathematics in economic theory.

12.00
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 and 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 and Game Theory

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. Allen, R.G.D., Mathematical Analysis for Economists, Trinity Press, 2014.
2. Chiang, Alpha C. and Wainwright, Kevin, Fundamental Methods of Mathematical              Economics, McGraw Hill Education; Fourth Edition, July 2017.
3. Mehta, B.C. & Madnani, G.M.K., Mathematics for Economists, Sultan Chand and              Sons, New Delhi, 2007.
4. Dowling, Edward, Mathematical Methods for Business and Economics, Schaum’s            Outlines, McGraw Hill Education, 2009.
5. Yamane, Taro, Mathematics for Economists: An Elementary Survey, Literary                    Licensing, LLC, 2012.
Academic Session: 
2018-19
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