MATHEMATICAL METHODS FOR ECONOMICS

Paper Code: 
ECO 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 (COs):

Course

Outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Paper Code

Paper Title

ECO 223

Mathematical Methods for Economics

CO21: Students willanalyse the basic mathematical concepts and tools used in economics. 

CO22: Students willexamine and intrepret the techniques of functions, differential calculus, matrices and determinants for economic analysis and optimizing functions.

 

Approach in teaching: Interactive Lectures and Discussions.

 

Learning activities for the students:

Practice Modules and

Assignments.

Class activity, Assignments and Semester end examinations.

 

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

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.

 

  1. Chiang, Alpha C. and Wainwright, Kevin, Fundamental Methods of Mathematical Economics, McGraw Hill Education; Fourth Edition, July 2017.

 

  1. Mehta, B.C. &Madnani, G.M.K., Mathematics for Economists, Sultan Chand and Sons,     New Delhi, 2007.

 

  1. Dowling, Edward, Mathematical Methods for Business and Economics, Schaum’s Outlines, McGraw Hill Education, 2009.

 

  1. Yamane, Taro, Mathematics for Economists: An Elementary Survey, Literary Licensing, LLC, 2012.

 

 

 

Academic Session: 
2021-22
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