AM01 Calculus of One Variable Handout

Advanced Math
Calculus of one variable

(Part 1 of 2)
Christoph Vanberg
University of Heidelberg
Department of Economics
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One variable calculus Part 1
▶ Functions in R1
▶ Graph of a function
▶ Derivative at a point
▶ Differentiability and continuity
One (and two) variable calculus is intuitively accessible because we can draw graphs. This
is not possible when we analyse models with more than two variables. So one goal of
this lecture will be for us to learn how to express intuitive graphical concepts in analytical
terms.
The material presented in this lecture is based on Chapter 2 of the textbook:

Simon, Carl and Lawrence Blume (1994) Mathematics for Economists. Norton.
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Functions in R
Definition: We use the symbol R to denote the set of real numbers. (Sometimes
we may also write R1 .)
Definition: A function in R is a rule that assigns exactly one real number to

each real number in its domain D ⊆ R.
We often write
y = f (x)
where
▶ y is a ‘dependent’ or ‘endogenous’ variable
▶ x is an ‘independent’ or ‘exogenous’ variable
You will also see the following notation
f :D→R
which simply means that f ‘maps’ from D to R.
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Graphs
Definition: The graph of a function f is the set of points (x, y ) in a Cartesian

plane that satisfy the equation y = f (x):
{(x, y ) ∈ D × R : f (x) = y }
We say that a function is increasing if its graph slopes up from left to right.
Analytically,
Definition: A function f is (strictly) increasing if x2 > x1 ⇒ f (x2 ) > f (x1 ). It is
(strictly) decreasing if x2 > x1 ⇒ f (x2 ) < f (x1 ).
A maximum is a point such that the graph slopes up to its left and down to its
right. Analytically,
Definition: x0 is a local maximum of the function f if there exists an open
interval (a, b) such that x0 ∈ (a, b) and f (x0 ) ≥ f (x) for all x ∈ (a, b).
Definition: x0 is a global maximum of the function f if f (x0 ) ≥ f (x) for all
x ∈ D.
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Neighborhoods and Limits
For what follows, we will need concepts that capture notions of ‘closeness’.
We first define what it means for two numbers to be ‘close’ to one another:
Definition: Let x0 , ϵ ∈ R with ϵ > 0. The open ball of radius ϵ centered at x0 ,
written Bϵ (x0 ) is the set of real numbers whose distance to x0 is (strictly) less
than ϵ:
Bϵ (x0 ) = (x0 − ϵ, x0 + ϵ)
Then we want to describe the idea that a function value f (x) approaches (gets
closer and closer to) a certain value as x approaches to some x0 :
Definition: Let f be a function in R and let x0 , c ∈ R. We say that c is the limit
of f (x) as x tends to x0 if for any ϵ > 0 there exists a δ > 0 such that
x ∈ Bδ (x0 ), x ̸= x0 ⇒ f (x) ∈ Bϵ (c).
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Continuity
Graphically, a function is continuous if its graph has no gaps.
Analytically,
Definition: A function f : D → R is continuous at x0 ∈ D if
lim f (x) = f (x0 )

x→x0
If f is continuous at all points in D, we say that it is continuous.
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Linear functions and slope
Definition: A linear function is of the form
f (x) = a + bx
Linear functions represent a very simple relationship between an endogenous

and an exogenous variable. As we will see, they can also be used to ‘locally’
approximate more complex (nonlinear) relationships.
Definition: The slope of a linear function f is the change in y (denoted ∆y )
associated with a one-unit increase in x. I.e.
Slope at x0 = f (x0 + 1) − f (x0 )
The slope of a linear function is the same no matter where (at which point x0 )
we start.
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Nonlinear functions and slope
▶ The slope (rate of change) of a nonlinear function changes as we move
along the x axis.
▶ We define the slope of a nonlinear function f at a point x0 ∈ D to be the
slope of the tangent line to the graph of f at the point (x0 , f (x0 )).
▶ Graphically, the tangent line, is defined as the limit of a sequence of
secant lines connecting the point (x0 , f (x0 )) to the point
(x0 + h, f (x0 + h)) for h tending to zero.
▶ The tangent line is uniquely defined only if this sequence of secant lines
has an unambiguous limit.
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Nonlinear functions and slope
Again, we translate this into an analytical statement:
Definition: Let (x0 , f (x0 )) be a point of the graph of y = f (x). The derivative
of f at x0 is the slope of the tangent line to the graph of f at (x0 , f (x0 )), given
by
f (x0 + h) − f (x0 )
f ′ (x0 ) = lim
h→0 h
provided that this limit exists. If so, we say that f is differentiable at x0 .
0 f (x +h)−f (x )
0
Exercise: Let g (h) = h
with f (x) = x 2 . Use our definition of the limit to find
the limit of g as h tends to zero.
Answer: It’s simple to establish that g (h) = 2x0 + h, and therefore we would guess that its limit as h → 0 is 2x0 . To
see that this is true, take any ϵ > 0. We need to find δ such that 0 < |h| < δ ⇒ |g (h) − 2x0 | = |h| < ϵ. Clearly,
any δ ∈ (0, ϵ] does the trick.
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Approximation by derivatives
The derivative of f at x0 can be used to approximate the change in y associated
with a change in x.
∆y = f (x0 + ∆x) − f (x0 ) ≈ dy = f ′ (x0 )∆x

Here,
▶ ∆x and ∆y refer to actual changes (movements along the graph of f )
▶ dy and dx denote differentials, i.e. movements alont the tangent line
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Rules of differentiation
▶ Power rule:
f (x) = x k ⇒ f ′ (x) = kx k−1
▶ Product rule:
f (x) = g (x)h(x) ⇒ f ′ (x) = g ′ (x)h(x) + h′ (x)g (x)
▶ Quotient rule:
g (x) g ′ (x)h(x) − h′ (x)g (x)

f (x) = ⇒ f ′ (x) =
h(x) h(x)2
▶ Chain rule:
f (x) = g (h(x)) ⇒ f ′ (x) = g ′ (h(x))h′ (x)
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Differentiability
We have already learned
Definition: A function f : D → R is differentiable at x0 ∈ D if the limit
f (x0 + h) − f (x0 )
lim
h→0 h
exists. If f is differentiable at all points in D, we say that it is differentiable.
Graphically, a function is differentiable if its graph is is smooth (no kinks or gaps)
and its tangent line is never vertical.
The easiest way to understand this is to look at examples of functions that are
not differentiable.
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Differentiability
Example 1:
f (x) = |x|
Exercise: Let g (h) = f (x0 +h)−f

h
(x0 )
with f (x) = |x|. Show, using the definition
of the limit from the previous slide, that the limit of g as h tends to zero is not
defined for x0 = 0. (See problem set.)
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Differentiability
Example 2: √
f (x) = x
▶ Note that the domain of this function is D = R+ .

▶ Also note that we can write this function as
1
f (x) = x 2
▶ If we ‘naively’ take its derivative, we get
1 1 1
f ′ (x) = x − 2 = 1
2 2x 2
▶ Clearly, f ′ (0) is not defined.
▶ You can check that the appropriate limit in the definition of the derivative does
not exist. (Also see problem set.) 14 of 15
Continuous differentiability
Note: If a function is differentiable (at x0 or on its domain), then it must also be
continuous (at x0 or on its domain). That is, a differentiable function is necessarily
a continuous function. (See problem set.)
Definition: Let f : D → R be a differentiable function with derivative f ′ (x). If
f ′ is a continuous function, we say that f is continuously differentiable, or C 1
for short.
You might ask, what’s an example of a function that is differentiable but not
continuously differentiable? And indeed, only very ‘crazy’ examples exist. You
are unlikely to encounter such a thing.
The following is a stronger property:
Definition: Let f : D → R be a differentiable function with derivative f ′ (x). If
f ′ is a also differentiable, we denote its derivative by f ′′ . If f ′′ is continuous (so
that f ′ is C 1 ), we say that f is twice continuously differentiable, or C 2 for short.
etc. up to C ∞
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Advanced Math

Calculus of one variable

The material presented in this lecture is based on Chapter 2 of the textbook:

Deﬁnition: A function in R is a rule that assigns exactly one real number to

You will also see the following notation

which simply means that f ‘maps’ from D to R.

Deﬁnition: The graph of a function f is the set of points (x, y ) in a Cartesian

x ∈ Bδ (x0 ), x ̸= x0 ⇒ f (x) ∈ Bϵ (c).

lim f (x) = f (x0 )

If f is continuous at all points in D, we say that it is continuous.

Deﬁnition: A linear function is of the form

Linear functions represent a very simple relationship between an endogenous

Slope at x0 = f (x0 + 1) − f (x0 )

∆y = f (x0 + ∆x) − f (x0 ) ≈ dy = f ′ (x0 )∆x

f (x) = g (x)h(x) ⇒ f ′ (x) = g ′ (x)h(x) + h′ (x)g (x)

g (x) g ′ (x)h(x) − h′ (x)g (x)

Exercise: Let g (h) = f (x0 +h)−f

▶ Note that the domain of this function is D = R+ .

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