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Course Code Course Title L T P C
BHUM212L Mathematics for Economic Analysis 3 0 0 3
Pre-requisite NIL Syllabus version
1.0
Course Objectives
1. To provide basic mathematical tools and techniques to solve the problems that
arise from Economics
2. To develop skills in Mathematical Modelling
3. To demonstrate the use of Mathematics in understanding theoretical Economics
Course Outcomes
Upon successful completion of the course students will be able to
1. Demonstrate the use of tools of differentiation in solving the economic problems.
2. Apply mathematical techniques to economic theory.
3. Describe economic problems in mathematical terms.
4. Implement methods from calculus to find the optimal location and value
(maximum/minimum) of a mathematical function.
5. Explain the constrained optimization techniques in economic models
and apply them to economic problems.
6. Apply the optimization techniques to economic problems.
Module:1 Economic Models and Functions 6 hours
Equations and Identities, The Real Number System, The Concept of Sets,
Functions – Types. Graphs of Functions, Types of Functions; Linear, Quadratic,
Polynomial, Power, Exponential and Logarithmic functions – Limits and continuity.
Economic Applications - Demand, Cost and Revenue functions.
Module:2 Unconstrained Optimization 5 hours
Slopes of Curves, Simple Rules of Differentiation, Second and Higher order
derivatives, Maxima and Minima, Convex and Concave functions. Economic
Applications – Marginal Revenue, Marginal Propensity to Consume.
Module:3 Derivatives and Optimization 5 hours
The Chain Rule, Partial Elasticities, Homogeneous and Homothetic functions
and Systems of Equations. Economic Applications – Macroeconomic Models.
Module:4 Multi Variable Optimization 7 hours
Functions of Several Variables, Geometric representation of functions of several
variables, Partial derivatives, Higher order partial derivatives. Economic
Applications - Marginal Product of Labour and Capital.
Module:5 Constrained Optimization 6 hours
The Lagrange Multiplier method, Economic Interpretations of Lagrange
Multipliers, Linear Programming Problems - Kuhn-Tucker Method, Kuhn- Tucker
Sufficiency Theorem, Arrow - Enthoven Sufficiency Theorem. Economic
Applications – Utility Maximization with Constraints.
Module:6 Integration, Differential and Difference Equations 6 hours
Definite and Indefinite Integrals and Economic Applications, First order and
Second order Difference equations, First order and second order differential
equations. Economic Applications- Income Distribution.
Module:7 Matrix and Vector Algebra 8 hours
Systems of Linear Equations – Matrices and Matrix Operations – Matrix
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Multiplication – The Transpose – Vectors – Determinants and Inverse of a Matrix
– The Leontief Model. Linear Programming – Graphical Approach – The Duality
Theorem – Matrix Formulation.
Module:8 Contemporary Issues 2 hours
Total Lecture Hours 45 hours
Text Books
Knut Sydsaeter, Peter Hammond, Arne Strom and Andres Carvajal (2021),
1.
Essential Mathematics for Economic Analysis. Pearson, Sixth Edition.
Reference Books
Chiang, Alpha C and Kevin Wainwright (2017), Fundamental Methods of
1.
Mathematical Economics. McGraw Hill Education, 4th Edition.
Simon C P and Lawrence Blume (2018), Mathematics for Economists, Viva
2.
Norton Student Edition.
Dowling, Edward T (2011), Shaum’s Outline Series on Introduction to
3.
Mathematical Economics. McGraw Hill, 3rd Edition.
Mode of Evaluation : CAT, Quiz, Assignment and FAT
Recommended by Board of Studies 23-02-2023
Approved by Academic Council No. 69 Date 16-03-2023
Proceedings of the 69th Academic Council (16.03.2023) 227
