Topic 1 MT Lecture
Topic 1 MT Lecture
Topic 1 MT Lecture
Quantitative Techniques I
Topic 1
Mathematical Techniques
Basic Arithmetic
Real Numbers
In algebra, we work with the set of real numbers, which we
can model using a number line.
-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10
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Basic Arithmetic (Cont…)
Rational Numbers
A number that can be expressed as the ratio of two
integers.
Examples of rational numbers:
The fraction ½ is the ratio of 1 to 2.
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Additional, + Example: 2 + 2 = 4
Subtraction, − 2–2=0
Multiplication, x 2x2=4
Division, ÷ 2÷2=1
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Basic Arithmetic (Cont…)
When different operations occur in the same
mathematical expression:-
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Basic Arithmetic (Cont…)
Examples:
2 10 6 (20) 6
Without Brackets : 7
2 2
2 (10 6) 2(4)
With Brackets : 4
2 2
Without Brackets : 6 9 4 3 15 7 8
With Brackets : 6 [9 (4 3)] 6 (9 1) 6 8 14
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Question 2
8 2 7 ( 4 1 )
2
When expressions have more than one
operation, we have to follow rules for the order 8 2 7 (4 1)
of operations:
1.First do all operations that lie inside
2
brackets .
2.Next, do any work with exponents or
8 2 7 (5)
radicals.
3.Working from left to right, do all multiplication 8 4 7 (5)
and division.
4.Finally, working from left to right, do all
addition and subtraction. 32 35
67
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Be careful: different calculators may give you different answers.
6
1
2(1 2)
6
(1 2) 9
2
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Polynomials
A polynomial is a mathematical expression involving a sum of
powers in one or more variables multiplied by coefficients. A
polynomial in one variable (i.e., a univariate polynomial) with
constant coefficients is given by
n 2
a n x ... a 2 x a1 x a 0
Source: http://mathworld.wolfram.com/Polynomial.html
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Polynomials (Cont…)
Sum of two polynomials: adding together the coefficients
sharing the same powers of variables:
(a2 x 2 a1 x a0 ) (b1 x b0 ) a2 x 2 (a1 b1 ) x (a0 b0 )
Example:
(4x5 + 3x3 + 4x) + ( 8x – 5x3 - 5 )
= 4x5 + 3x3 – 5x3 + 4x + 8x – 5
= 4x5 – 2x3 + 12x – 5
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Polynomials (Cont…)
Product of two polynomials: multiplying term by term and
combining the results:
(a 2 x 2 a1 x a0 )(b1 x b0 )
a 2 x 2 (b1 x b0 ) a1 x(b1 x b0 ) a0 (b1 x b0 )
a 2 b1 x 3 (a 2 b0 a1b1 ) x 2 (a1b0 a0 b1 ) x a0 b0
Example:
(x – 1) (2x + 3) = 2x2 + 3x – 2x – 3
= 2x2 + x – 3
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Polynomials (Cont…)
The special names given to polynomials of low orders
Polynomial
Polynomial name Example
order
0 constant 10
1 Linear 8x + 10
2 Quadratic 5x2 + 8x + 10
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Factoring Polynomials
Common Factors
take out a common factor
ab ac a (b c) a = common
factor
4 x 5 12 x 4 8x 3 4x 3 ( x 2 3x 2)
4x3 = common
factor
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Factoring Polynomials
Example: Factor 2y3 + 4y2 – 16y
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Factoring Polynomials
Grouping
split the polynomial in two pieces and take out common
factors in each of them
5 x 3 10 x 2 3 x 6
5 x 2 ( x 2) 3( x 2)
2
(5 x 3)( x 2)
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Factoring Polynomials
Example: Factor 5y3 + 3y2 + 10y + 6
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Factoring Polynomials (Cont…)
General Quadratics
Difference of Squares
A2 B 2 ( A B)( A B)
x 2 9 ( x 3)( x 3)
Perfect Squares
A2 2 AB B 2 ( A B) 2
A2 2 AB B 2 ( A B) 2
x 2 14 x 49 ( x 7) 2
Source: http://tutorial.math.lamar.edu/Classes/Alg/Factoring.aspx
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Question
2
Multiply : ( x 1)( x 5 x 6)
Polynomial: (x +1)(x
(x22+5x+6)
+5x+6)
Distribute:
Multiply: x3+5x2+6x+x2+5x+6
Add Common Terms: x3 +6x
+5x2 +6x+11x
+x2 +5x+6
Standard Form: x3+6x2+11x+6
Rational Expressions
A rational expression is an algebraic expression of the form:
P( z )
R( z )
Q( z )
where P(z) and Q(z) are simpler expressions (usually
polynomials), and the denominator Q(z) is not zero.
Example: 2 xy y 2
2
2x 1
Source: http://www.sparknotes.com/math/algebra2/rationalexpressions/section1.html
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Numerator a
Fractions
Denominator b
Quotient of “a” and “b”, or fraction “a” over “b”
The rule governing the use of algebraic fractions are identical to
those used for ordinary fractions.
ac a a c
ad bc
bc b b d
a c ac a c ad bc
b b b b d bd
a c ac a c a d
b d bd b d b c
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Fractions (Cont…)
1. Simplification of algebraic fractions
• Fractions may be simplified by moving a common factor
from numerator and denominator.
• Examples:
14ax 2 x(7 a ) 2 x
2
("7 a" is a common factor)
21a 3a (7 a ) 3a
be added or subtracted.
x y x y
i)
2 3
MUST have common denominators
3( x y ) 2( x y )
( lowest common denominato r )
6 6
5x y
6 3a 2b 3b a WRONG ! ! !
ii ) 3 a 2b 3b a
ab b2
a 2 2b 2 ab b2
ab 2
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Fractions (Cont…)
3. Multiplication and division of fractions
x 2 1 3x 6 ab 1
2 2
2
x 2x 4x 4 a b a b
( x 1)( x 1) 3( x 2) ab a b
x( x 2) 4( x 1) ( a b)(a b) 1
3( x 1)( x 1)( x 2) ab
4 x( x 2)( x 1) ab
3( x 1) WRONG !!! IF
4x ab a b
(a b)(a b) 1
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Fractions (Cont…) ( A B )( A B )
A 2 AB AB B 2
4. Simplification and complex fractions A2 B 2
a2 b2
2 2
b a b ab
ab b 3
3 (a b)(a b) 3 WRONG !!! IF
(a b)(a b) 3
b ab
b ab
3(a b)
b
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Fractions (Cont…)
5. The three signs of a fraction
• The sign of the numerator
• The sign of denominator
• The sign of the fraction proper
8 8
( 4) 4 ( 4) 4
2 2
8 8
(4) 4 (4) 4
2 2
8
(4) 4
2
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Ratios
A ratio is a different way of expressing a fraction.
A fraction is the ratio of a numerator to a denominator.
Numerator
Fraction
Denominator
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Percentages
A percentage is a fraction with a denominator of 100:
Numerator
Percentage(%)
100
r
r%
100
Example: what is 12% of RM80
12
RM 80 RM 9.60
100
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Percentages (cont…)
Application of percentages
In business and management:-
Sales manager
Personnel staff
Accountant
Economists
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Percentages (cont…)
Markups
If the percentages increase is r % then
r
final value original value (1 )
100
r
where (1 ) is called the scale factor for an r % increase.
100
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Percentages (cont…)
Markups: Applications
A bank gives 4% interest at the end of each year on any sum left in a
deposit account for a whole year. If Mr. Smith opens such a deposit
account with RM20,000.
a) Calculate the interest gained by Mr. Smith.
b) What is the balance in the account at the end of 1 year?
Interest gained = 4
RM 20,000 RM 800
100
End of year balance = 4
RM 20,000 (1 ) RM 20,800
100
With bank accounts the original deposit is called the principle while
the percentage markup is called the interest rate.
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Percentages (cont…)
Marking Down
Used to calculate discounts.
If the percentages decrease is r % then
r
final value original value (1 )
100
r
where (1 100 ) is called the scale factor for an r %
decrease.
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Percentages (cont…)
Marking Down: Applications
The normal retail price of a product sold in a shop is RM5, but
will be reduced by 10% for cash purchase.
a) Calculate how much the 10% discount given on the retail
price?
b) What price does the consumer pay for cash?
10
Discount = RM 5 RM 0.50
100
10
Cash price paid = RM 5 (1 ) RM 4.50
100
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Percentages (cont…)
Marking Down: Applications
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Power and Root
A power function has the form:
n
M a
a is known as the base, while n is called the power or
exponent, and the power function means that a is
multiplied by itself n times:
M(3)= 53
M(n) = an =(5)(5)(5)
= a·a·········a =125
n times a is raised to the
power n
3
5 is pronounced as "five raised to the third power" or "five to the third“ or "five cubed".
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Power and Root
n
M a
Definition: if n is any integer, then the n th root of a is
defined as 1
a n
Notation: 1
a a
n n
23/5/28 36
Power and Root (cont…)
Rule applying to powers:
m n mn m n mn
a a a a a a
m n mn
(a ) a m
(ab) a b m m
0
a 1 m 1
a m
m a
n m
a a n
23/5/28 37
Power and Root (cont…) CAUTION!
Rule applying to powers: a m a n a mn
Rule 1 : Product rule :
a m a n a mn
When power functions with the same base are multiplied
together, am·an, that base is multiplied by itself m times, and then
again by n times, which is equivalent to adding their exponents:
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Power and Root (cont…)
Rule applying to powers:
Rule 6 : Rational exponent :
Power
m
n m
a a n root
Example:
3
2 3
2 2 2
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Power and Root (cont…)
Rule applying to powers:
Rule 7 : Negative exponent rule :
m 1
a m
a
A power of some number with a negative (integer) exponent is
defined as negative exponent is 1 divided by the base raised to
the positive exponent:
Example:
a0 1 a–1 = a0–1
0-m
= a0/a1
a -m
a
= = am = (a·a·····a) m times = 1/a
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44
Power and Root (cont…)
Rule applying to powers:
Example:
51 = 5
23/5/28 45
Power and Root (cont…)
Properties of nth roots
n
a a
n
ab a b
n n n
b n
b
m n
a mn a
n n
n n
a a if n is odd a a if n is even
23/5/28 46
Power and Root (cont…)
Properties of nth roots
Example: 3
n
ab a b
n n
32 8.4
3
8 4 3 3
23 4
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Power and Root (cont…)
Properties of nth roots
Rule 2 : Quotient rule :
n
n a a
b n
b
Example:
81 2
81
2 2
100 100
9 2
92 9
10 2
100 2 10
23/5/28 48
Power and Root (cont…)
Properties of nth roots
m n mn
th
Rule 3 : m root of an n root th (a ) a
1 1 1
mn
m n
a mn
a (a ) a
m n
m n
a mn a
Example:
2 2
81 4 81
3 3
23/5/28 49
Power and Root (cont…)
3
5 3
125 5
3 3
5
3
3 125 5
n n
a a if n is odd
23/5/28 50
Power and Root (cont…)
if x 5 also, if x 5
2 2
x 25 x 25
if reverse the problem
2
x 25
x?
23/5/28 51
Power and Root (cont…)
We have seen that :
5 2
25 5 5
2
25 5
so 5 5, 5 5
23/5/28 52
Question
1.) Simplify (y-4/5)1/3.
So the logarithm is 3
log2(8) = 3
•"the logarithm of 8 with base 2 is 3"
•or "log base 2 of 8 is 3"
•or "the base-2 log of 8 is 3"
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Logarithms tell you what the exponent is!
So this:
is also this:
51 5 log5 5 1
4 1
3 0
log 1 0
3
4
Example Solvelog 4 x 32 .
Solution log 4 x 32
x4
3
2
x8
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Logarithms
General rules for the use of logarithms
i. The general expression of a logarithms
If Y = ax loga Y = loga ax
loga Y = x loga a
loga Y = x In general: If ax = Y,
then logaY = x.
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Logarithms (cont…)
ii. Laws governing the use of logarithms
a. The logarithm of a product:
log a MN log a M log a N
log a (2 3) log a 2 log a 3
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Logarithms (cont…)
ii. Laws governing the use of logarithms
b. The logarithm of a quotient:
M
log a log a M log a N
N am an = am-n
5 loga(m n) = loga (m) - loga (n)
log log 5 log 3
3
CAUTION!
M loga M loga M
loga loga M loga N
N loga N loga N
loga M N loga M loga N
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Y a x ........log a Y x
Logarithms (cont…)
The logarithm of a power:
c. Y a loga Y
log a Y p p log a Y and raise both sides to the p power:
log a Y p
p
2
log 10 100 2 log 10 100 Y a
a
2 log 10 ( 10 )2 p log a Y
Yp
2( 2 ) log 10 10
2( 2 ) log both sides
4
log a Y p log a a p loga Y p log a Y
CAUTION! log a 3 x 2 log a 3 2 log a x
loga 3 x 2 2 loga 3 x
3x
loga 3 x2
x 2 loga 3 log a 3 x 2 log a 2 log a 3 x log a 3 2
3
23/5/28 61
Logarithms (cont…)
d. The change of base in a logarithm:
log c b log a b log c a
log10 5 log10 5 log10 10
Changing the base of logarithm:
23/5/28 62
Inequalities
1. Definitions
23/5/28 63
Inequalities (cont…)
2. Rules for the use of inequalities
i. An inequality will still hold after each side has been
increased, diminished, multiplied or divided by the
same positive quantity.
Example:
if a > b, then, provided c > 0 If 7 > 3, c = 2
(a + c) > (b + c) (7 + 2) > (3 + 2)
(a – c) > (b – c) (7 – 2) > (3 – 2)
7X2>3X2
ac > bc
a b 7 3
c c 2 2
23/5/28 64
Inequalities (cont…)
ii. Any increase in an equality may be moved from one
side to the other provided that its sign is changed.
Example:
if a–c>b 53 1
a>b+c
5 1 3
iii. If the sides of an inequality are interchanged then the
sign must also be changed.
23/5/28 65
Inequalities (cont…)
iv. If both sides of an inequality are multiplied or divided
by the same negative quantity then the sign of the
inequality must be reversed.
Example:
if a > b , and p < 0
then pa < pb
5 2, p 1
and a b 5 2, p 1 5 2
p p 5(1) 2(1) 1 1
5 2 5 2
23/5/28 66
Inequalities (cont…)
Example:
If a b
a If b
4 2 25
c d then
then 5 3
1 1 1 1
5 3
c d 2 5
4 2 a b
a b
23/5/28 67
Question
1 1
1.) Factor x 2
x 2
1
x
x x2
2.) Simplify
2 x 1 2
x
3 4 3 0.6 5
3.) Evaluate: log 5 8 log 2 4 ln ( e log10 5 )
5
3 x 7 13
3x 6
x 2
23/5/28 72
Linear and Simultaneous Equations
Equations:
A mathematical statement setting two algebraic expressions
equal to each other.
The degree of an equation is determined by the highest power
(or exponent) of the unknown present in the equation.
i. ax + b = 0 (first degree or linear equation)
ii. ax2 + bx + c = 0 (second degree or quadratic
equation)
iii. ax3 + bx2 + c = 0 (third degree or cubic
equation)
iv. xn = 0 (equation of the nth degree)
73
Linear and Simultaneous Equations (cont…)
Linear equations:
y = mx + c
74
Linear and Simultaneous Equations (cont…)
Linear equations:
In graphing a function such as f(x),
05/28/23 75
Linear and Simultaneous Equations (cont…)
Linear equations:
In graphing a function such as f(x),
m = -4
m = +3
m = -1/4
x
m = - 4 means strong negative relationship between x
and y and when x increases by 1, y decreases by 4.
m = 3 means weak positive relationship between x and y
05/28/23
and when x increases76by 1, y increases by 3.
Linear and Simultaneous Equations (cont…)
Linear equations:
A negatively slope moves down.
05/28/23 77
Linear and Simultaneous Equations (cont…)
Linear equations:
y y intercept
x intercept
x
The y intercept is the point where the graph
crosses the y axis; it occurs when x = 0.
The x intercept is the point where the line
intersects the x axis; its occurs when y = 0.
05/28/23 78
Linear and Simultaneous Equations (cont…)
To plot the graph:- plot two or preferably, three points.
Example: Y
Sketch the line y = 100 – 2x
100 (0, 100)
when x = 0, y = 100
y = 0, x = 50
y
The slope of the line (m) (50, 0)
x
100 0 x
2 50
0 50
79
Linear and Simultaneous Equations (cont…)
Example:
Find the equation of the line that passes through points (2, 3) and (-1, 4)
y 3 4 1
Method 1: m
x 2 (1) 3
y
For intercept on the y axis (0, c)
(-1, 4) .11 m
y
c4
1 y mx c
-
3 x 0 (1) 3 1 11
y x
.(2, 3) c4
1
3
3 3
3 y x 11
x 1 1 12 11
-1 2 c 4
3 3 3 3 y x 11 0
05/28/23 80
Example:
Find the equation of the line that passes through points (2, 3) and (-1, 4)
Method 2:
Formula:
y y1 y2 y1 y 3 43
x x1 x2 x1 x 2 1 2
Step 1: y 3 1
(2, 3) is (x1, y1)
(-1, 4) is (x2, y2) x 2 3
or vice versa
3 y 9 x 2
Step 2: substitutes x1, y1, x2, 3 y x 11
y2 into the formula.
3 y x 11 0
UBEQ1013 Lecture 01 Jan 2015 trimester 81
Linear and Simultaneous Equations (cont…)
Solution quadratic equations
i. By taking the square root
Example: (x - 2)2 = 9
x 2 9 x 2 3
x – 2 = +3 or x – 2 = – 3
x = 5 or x=–1
ii. By factoring
Example: 3x2 – 2x – 5 = 0 3x -5
(3x – 5)(x + 1) =0 x 1
3x = 5 or x = – 1 3x – 5x = -2x
x = 5/3 or x = – 1
82
Linear and Simultaneous Equations (cont…)
iii. By formula
If, ax2 + bx +c = 0
Then
b b 2 4ac
x
2a
05/28/23 83
Linear and Simultaneous Equations (cont…)
Example: 2
b b 4ac
3x2 + 5x = 2 x
3x2 + 5x – 2 = 0
2a
a = 3, b = 5, c = -2
2
b2 (25)> 4ac(-24),
5 5 4(3)(2) quadratic function will
x have two solutions.
2(3)
5 49 5 7
x
6 6
1
x 2 or
3
84
Linear and Simultaneous Equations (cont…)
Example: 2
b b 4ac
-4x2 + 5x – 2 = 0 x
a = -4, b = 5, c = -2
2a
88
Question: Sketch the function y = -x2 - 2x + 8
Maximum point y a = –1, b = -2, c = 8
(-1,9) i. a = – 1 < 0, parabola open down
x 9–
8x
–
“∩”.
ii. x = 0, y = c =8.
iii. y = 0, b b 2 4ac
x
2a
( 2) (2) 2 4( 1)(8)
x
2(1)
x| | x| x 2 or 4
-4 -1 2 iv. x b (2) 1
2a 2(1)
f(x) = –x2 - 2x + 8 4ac b 2 4(1)(8) (2) 2
y 9
89
4a 4(1)
Linear and Simultaneous Equations (cont…)
Simultaneous equations
To solve a system of 2 or more equation
simultaneously, the equation must be
i. Consistent
90
Linear and Simultaneous Equations (cont…)
Simultaneous equations
Pairs of the linear equations may be:
i. Inconsistent, e.g.
xy2
x–y=2
y -2-x
x–y=5
x y5
y -5- x
Linear and Simultaneous Equations (cont…)
Simultaneous equations x y
Pairs of the linear equations may be: 0 2
1 1.3333
ii. Dependent, e.g. 2 0.6667
2x + 3y = 6 3 0
6x + 9y = 18 …etc
2x 3y 6 6x 9y 18
3y 6 - 2x 9y 18 - 6x
2 2
y 2- x y 2- x
3 3
92
Linear and Simultaneous Equations (cont…)
Simultaneous equations
Pairs of the linear equations may be:
93
Linear and Simultaneous Equations (cont…)
Simultaneous equations
A system of simultaneous linear equation can be
solved by:-
i. Substitution method
ii. Elimination method
94
Linear and Simultaneous Equations (cont…)
Substitution method
Example: 8b – 3m = 7 [1]
-b + 7m = 19 [2]
I. Solve one of the equations for one variable in terms of
the other.
From [2]: b = 7m – 19
II. Substitute the value of that term in the other equation, in
[1], and solve for m.
8b – 3m = 7
8(7m – 19) = 7
56m – 152 – 3m = 7
53m = 159
m=3
95
Linear and Simultaneous Equations (cont…)
Substitution method
Example: 8b – 3m = 7 [1]
-b + 7m = 19 [2]
96
Linear and Simultaneous Equations (cont…)
Elimination Method
Example: 8b – 3m = 7 [1]
-b + 7m = 19 [2]
I. Multiply [1] by coefficient of b (or m) in [2] and [2] by the
coefficient of b (or m) in [1]. Picking m, we get:
From [1]: 7(8b – 3m = 7) 56b – 21m = 49 [3]
From [2]: -3 (-b + 7m = 19) 3b – 21m = -57 [4]
II. Subtract [3] and [4] to eliminate the selected variable.
53b = 106
b=2
97
Linear and Simultaneous Equations (cont…)
Elimination Method
Example: 8b – 3m = 7 [1]
-b + 7m = 19 [2]
98
E.g. 3x + 4y = 26 (1) “Solve simultaneously”
7x - y = 9 (2) Make either coefficient of x or y
‘same size’
(3)=(2)x4 28x - 4y = 36
(1) 3x + 4y = 26 3x + 4y = 26
When x = 2
(1)+(3) 31x -4y + 4y = 62 32 + 4y = 26
6 + 4y = 26
(1)+(3) 31x = 62
4y = 20
x = 2 y=5
Question:
Find the x and y for the following 2 equations
4x + 3y = 11 (eq.1)
2x + y = 5 (eq.2)
Hence
11 - 3y = 10 - 2y
Collect terms
11 – 10 = -2y + 3y
y=1
Compute x
4x = 10 - 2y
4x = 10 – 2 = 8
x=2
The Derivative and the Rules of
Differentiation
The slope of a straight line is defined to be the change in y
divided by the corresponding change in x.
y
In notation, slope, m
x
y y
If the slope is positive,
the line is upward sloping.
If the slope is negative, x
x
the line is downward sloping. y
If the slope is zero,
the line is horizontal.
x
To calculate the slope we can use differentiation approach.
101
The Derivative and the Rules of
Differentiation (cont…)
y
Tangent
at x = a y = f (x)
x
a
When a function given, y = f(x), is non-linear, we need the
idea of a tangent instead of slope/ gradient.
Tangent = a straight line which passes through a point on a
curve and which just touches the curve at this point.
To calculate f ’ (a) exactly using graph is difficult and
inaccurate.
Apply differentiation
102
The Derivative and the Rules of
Differentiation (cont…)
y
Tangent
at x = a y = f (x)
x
a’ a a’’
The slope/ gradient of a straight line is fixed.
The slope of a curve varies as we move along with x.
The tangent at x = a of a function f is represented by f ’ (a).
The slope function f ’ (x) corresponding to each value of x is
also referred as derived function, alternative notation: dy
dx
103
The Derivative and the Rules of
Differentiation (cont…)
dy
The derivative of a function f, denoted
dx = f ’(x), measures
104
The Derivative and the Rules of Differentiation
(cont…)
Rules of Differentiation
i. The Constant Function Rule
ii. The Linear Function Rule
105
i. The Constant Function Rule
f(x) = k, where k is a constant
f ’(x) = 0
Example f(x) = 8
f ’(x) = 0
dTFC
If TFC c, then 0 where TFC is total fixed costs
dQ
Fixed cost don' t change when a change in output.
05/28/23 106
ii. The Linear Function Rule
f(x) = mx + k
When x is to the power of 1, the derivative of x is
1. Therefore, derivative of mx is the constant
slope m.
f ’(x) = m
Example
f(x) = 7x +2
f ’(x) = 7
05/28/23 107
iii. The Power Function Rule
f(x) = kxn where n is any nonzero real number
The derivative of a constant times a function is the constant
times the derivative of the function. That is,
f ’(x) = k.n.xn-1
2
Example: given f ( x ) 5x , which is the case where k 5
n2
and , we obtain
f ' ( x ) 2 5x
2 1
10 x
05/28/23 108
iv. The Rules for Sum and Differences
f(x) = g(x) ± h(x)
3 1
h( x).g ( x) g ( x).h( x) 2x 2
6x 2
y'
h x
2
3 1 2 1 1 2
1
1
x .(4 x 6) [(2 x . 6 x) x
2 2
1
2
] y 2 x 6 x
2
2 2
2 1 1
x 2
1
3 x 3 x2 2
3 1 3 1 3 3( x 1)
4 x 6 x [ x 3x ]
2 2 2 2 3 x or
x x
x
1 1
3x 3x
2 2
114
The Derivative and the Rules of
Differentiation (cont…)
Application of derivatives
i. Increasing and decreasing function.
f ’(a) > 0: increasing function at x = a
f ’(a) < 0: decreasing function at x = a
y y
f ’ (a) < 0
f ’ (a) > 0
0 a x 0 a x
Slope > 0 Slope < 0
Increasing function at x = a Decreasing function at x = a
05/28/23 115
The Derivative and the Rules of
Differentiation (cont…)
Application of derivatives
ii. Concavity and convexity
f ’’(a) > 0: f (x) is convex at x = a
y y
0 a x 0 a x
116
The Derivative and the Rules of
Differentiation (cont…)
Application of derivatives
ii. Concavity and convexity
f ’’(a) < 0: f (x) is concave at x = a
y y
0 a x 0 a x
117
The Derivative and the Rules of
Differentiation (cont…)
Application of derivatives
iii. Relative extreme (maximum or minimum)
A point at which a function is at a relative maximum or
minimum at a point a.
The function must be relatively plateau, i.e. neither
increasing nor decreasing at a → the first derivative of
the function at a must = 0 or be undefined (critical point
or value).
118
The Derivative and the Rules of
Differentiation (cont…) To distinguish mathematically between
a relative maximum & minimum, the 2nd
Application of derivatives derivative test is used. f ’ (a) = 0
0 a x 0 a x
f ’ (a) = 0 f ’ (a) = 0
f ’’ (a) > 0 f ’’ (a) < 0
119
The Derivative and the Rules of
Differentiation (cont…)
Application of derivatives
iv. Inflection Point
f ’’ (a) = 0 or is undefined
Concavity change at x = a
Graph crosses it tangent line at x = a
y y
Inflection point at x = a
f ’ (a) = 0 f ’ (a) = 0
f ’’ (a) = 0 f ’’ (a) = 0
0 a x 0 a x
120
The Derivative and the Rules of
Differentiation (cont…)
Application of derivatives
y y
Inflection point at x = a
0 a x 0 a x
f ’ (a) < 0 f ’ (a) > 0
f ’’ (a) = 0 f ’’ (a) = 0
121
The Derivative & Rules of Differentiation
(con’t)
Application of derivatives
Therefore to use the successive-derivative test (if f ’’ (a) = 0) :
If the first nonzero value of a higher-order derivative
(evaluated at critical point), is odd-numbered derivative
then the function is an inflection point.
122
The Derivative and the Rules of
Differentiation (cont…)
Application of derivatives
v. Optimizing of functions
The process of finding the relative maximum or
minimum of a function.
Given a differentiable function,
1. Find the first-order condition (necessary
condition), set it equal zero and solve for the
critical point(s).
2. Take the second-order condition (sufficient
condition) and evaluate it at the critical point(s) and
check for the sign(s). f ’’ (a) < 0 , max
f ’’ (a) > 0, min
123
The Derivative and the Rules of
Differentiation (cont…)
Application of derivatives
124
Question: Optimize f(Q) = 2Q 3
- 30Q 2
+ 126Q + 59.
a) Find the Critical points by taking FOC, set =0 and solve for Q
Q’ = 6Q2 -60Q +126
Let Q’ = 6Q2 -60Q+126 = 0
6(Q-3)(Q-7) = 0
Critical value
Q=3 Q=7
b) Test for concavity by taking SOC; evaluating it at the critical
values, and checking the signs to distinguish between a relative
max or min.
Q’’ = 12Q - 60
When Q = 3, f’’(3) = 12(3) - 60 = - 24 < 0 concave, relative
maximum
When
So thisQfunction
= 7, f’’(3)
is =maximized
12(7) - 60 at
= Q=3
24 and
> 0 minimized
convex, relative
at minimum
Q=7.
Integration
The opposite process to differentiation.
Rule of integration:
To increase the power of x by 1, b+1
To divide the function by b+1, and
To add an arbitrary constant.
a b 1
ax dx b 1 x C
b
126
Integration (cont…) axn 1
ax dx n 1 c
n
Example:
(6 x 2
x)dx
6 21 x11
x C
2 1 11
6 3 1 2
x x C
3 2
1 2
2x x C
3
2
127
Integration (cont…)
Example:
dy
If = 5x2 and y = 10 when x = 0, find y in terms of x.
dx
5 3
y 5 x dx x C
2
3
5 3
When x = 0, y = 10 (0) C 10 C = 10
3
5 3
Thus, y x 10
3
128
Question:
( 1 ) 2 x( x 1 )dx
2
5x2 6x
(2)Integrate 3
with respect to x
x
129
Solution:
2 4 2 2
2 3
( 1 ) 2 x( x 1 )dx ( 2 x 2 x )dx x x c
4 2
4
x 2
x c
2
5x2 6x
(2)Integrate 3
with respect to x
x
130
5x2 6 x
(2)Integrate 3
with respect to x
x
2
5x 6x
1
3 x dx 5 x 6 x x 3 dx
2
5 2
5 x 3
6 x 3
dx
8 5
5x 6x
3 3
c
8 5
3 3
8 5
15 x 18 x
3 3
c
8 5
23/5/28 131
Marginal Function in Economics
Marginal analysis is the study of the rate of change of
economic quantities.
For example, an economist is not merely concerned with
the value of an economy’s gross domestic product
(GDP) at a given time but is equally concerned with the
rate at which it is growing or declining.
A manufacturer is not only interested in the total cost
corresponding to a certain level of production of a
commodity but also is interested in the rate of change of
the total cost with respect to the level of production.
132
Cost, Revenue and Profit Function
Cost Functions
Fixed (or set-up) costs
Costs associated with the purchase, rent or lease of
equipment and fixed overheads.
All those costs that need to be borne before the begin of
production. Thus, independent of the number of items to be
produced.
Variable costs
Costs associated with the supply of the raw materials and
overheads necessary to manufacture each product.
Special costs
Optional costs relating to storage, maintenance or
deterioration. The effects of this type of cost would only be
significant for large production.
133
Cost, Revenue and Profit Function
(cont…)
Cost Functions
Total Cost = Total Fixed Cost + Total Variable Cost
TC = TFC + TVC or TC = FC + VC(Q)
Revenue Functions
The money received for selling the output of some
process. TR = P X Q
Profit Functions
The difference between the revenue and cost functions.
= TR – TC
134
Marginal Function in Economics (Cost Functions)
Total cost (TC) – the cost of producing a particular amount of
product.
Average cost (AC) – obtained by dividing the total production
cost by the number of units produced (Q or x). TC
Marginal cost (MC) AC
– the cost of producing one extra unit.
Q
– marginal cost of a given output is the rate at which total cost
is changing at that output.
– differentiate the total cost function
if y TC
to get marginal cost function. dy
MC
– this relationship hold for revenue function. dQ
135
Marginal Function in Economics (Revenue
Functions) TR PQ
Total revenue (TR) – the value of a firm’s sales. It is calculated as
the price of the good (P) multiplied by the quantity sold (Q or x).
Average revenue (AR) – obtained by dividing TR
the total revenue by the the quantity sold (Q or x). AR
Marginal revenue (MR)
Q
– the change in total revenue that results from a one unit increase
in the quantity sold.
– It is calculated as the change in total revenue divided by the
change in quantity sold. if y TR
– differentiate the total revenue function to
get marginal revenue function. dy
MR
dQ
136
Marginal Function in Economics
(cont…)
Optimizing Economic Function
The business decision maker and economist are interest in
finding the maximum value of certain relationship for:-
Profit
Sales revenue
Welfare
137
Marginal Function in Economics
(cont…)
Optimizing Economic Function
Example:
If a firm has
Total Revenue: TR = 40Q – 8Q2
Total Cost: TC = 8 +16Q – Q2
Where Q = thousand of units of product, then its profit function
(Π) will be the difference between its total revenue and total
cost: TR TC
(40Q 8Q 2 ) (8 16Q Q 2 )
40Q 8Q 2 8 16Q Q 2
8 24Q 7Q 2
138
Marginal Function in Economics
(cont…)
Example (cont…)
If we wish to find where maximum profits occurs, we differentiate to give:
First order condition:
8 24Q 7Q 2
(set F.O.C = 0)
d
24 14Q 0
dQ
24
Q 1.714
14
d2
2
14 0 (maximum)
dQ
Integrate Differentiate
MARGINAL
141
Past Year
Question
Past Year Question
TR= f(Q)=PQ= 6 Q2 + 3Q
dTR
MR 12Q 3
dQ
5
TC f (Q) MCdQ 5Q 6dQ Q 2 6Q c
25
Given that there is no FC, t/f TC Q 2 6Q
2
5 2
Q 6Q
TC 2 5
AC Q6
Q Q 2
5 2 7 2
(v) the total profit ( ) TR TC 6Q 2
3Q Q 6Q Q 3Q
2 2
a = – 2, b = 96, c = 0
i. a = – 2 < 0, parabola open down
“∩”.
ii. Q = 0, y = TR =0.
TR (24,1152) iii. TR = 0, Q=0 or 48
x
(RM)
iv.
b 96
Q 24
2a 2(2)
4ac b 2 4(2)(0) (96) 2
TR 1152
4a 4(2)
|x | x| Q
0 24 48 (units)
f(x) = –2 Q2 + 96Q
UBEQ 1013 20 Dec 2010
-12
End of Topic 1