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Mathematics for Economics | 3rd Edition
CH 22.1, 1EP (0)
Step-by-step solution
Show all steps
100% (1 rating) for this solution
Step 1/8
Use a phase diagram and theorem of stability stated below to conduct
qualitative analysis of .
Theorem of stability: A steady state equilibrium of a nonlinear, !rst order
differential equation is stable if the derivative is negative at
that point and unstable if the derivative is positive at that point.
Step 2/8
There are many nonlinear !rst order differential equations derived for
dynamical situations in economics which cannot be solved explicitly as a
function of time. As an alternative it is possible to conduct qualitative
analysis for such equations with the help of phase diagram of that
equation. The phase diagram analysis is a method to illustrate steady
states of a differential equation and the behaviour of the solutions around
the steady states. The phase diagram of an equation is its graph having
values of y along horizontal axis and values of are shown along vertical
axis.
Any point where the phase diagram (graph) intersects the horizontal axis
is called the steady state solution of given differential equation. The
stability of the obtained solution can be analyzed in two ways: (1) by
arrows of motion, and (2) by using stability theorem.
Step 3/8
Results of application of Phase diagram and Theorem of Stability
Stability with Arrows of Motion: At the point where the graph of the
equation is above the horizontal axis, is positive and
therefore y is increasing, and at the point where graph of equation
is below the horizontal axis, is negative and therefore y is
decreasing.
To illustrate the behaviour of y, the arrows can be added along the
horizontal axis. The arrows will point to the right on any segment for
which the graph is above the axis and to the left on the segment for
which the graph is below the horizontal axis. The point at which arrows
from both sides point into it is the stable steady state (stable equilibrium)
point and the point from which arrows go outward is the point of
unstable state or unstable equilibrium.
Stability using Stability Theorem: Calculate the slope of the tangent to
the curve (phase diagram) at any point .
If slope of tangent at point , , the equilibrium at point
is stable.
If slope of tangent at point , , the equilibrium at point
is unstable.
Step 4/8
The objective is to draw phase diagram for the equation
and to conduct the qualitative analysis of the equation.
The steady state solution/s is obtained by setting and solving it
further algebraically as:
Then,
Thus and are the steady state solutions of the given
differential equation. At these points the phase diagram intersects
horizontal axis.
Step 5/8
Now, determine critical point by setting and check whether the
critical point is a maximum or minimum.
Then,
So, is the critical point.
Step 6/8
Further, since . Therefore, at point there is relative
minimum. The phase diagram of the equation is shown in !gure here.
From the Motion of Arrows:
The arrows move into point , therefore, the equilibrium at is
stable. The arrows move out of the point , therefore, the equilibrium
at is unstable.
Step 7/8
From the theorem of stability:
At steady state point ,
Hence, the equilibrium at point is stable.
At steady state point ,
Hence, the equilibrium at point is unstable.
Step 8/8
Thus, with the help of phase diagram and the theorem of stability, it has
been shown analytically that the steady state equilibrium of given
nonlinear, !rst order differential equation at point is stable and at
point unstable.
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Chapter 22, Chapter 22.1,
Problem 6RE Problem 2E
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Mathematics for Economics | 3rd Edition
CH 22.1, 2EP (0)
Step-by-step solution
Show all steps
Step 1/8
Use a phase diagram and theorem of stability stated below to conduct
qualitative analysis of .
Theorem of stability: A steady state equilibrium of a nonlinear, !rst order
differential equation is stable if the derivative is negative at
that point and unstable if the derivative is positive at that point.
Step 2/8
There are many nonlinear !rst order differential equations derived for
dynamical situations in economics which cannot be solved explicitly as a
function of time. As an alternative it is possible to conduct qualitative
analysis for such equations with the help of phase diagram of that
equation. The phase diagram analysis is a method to illustrate steady
states of a differential equation and the behaviour of the solutions around
the steady states. The phase diagram of an equation is its graph having
values of y along horizontal axis and values of are shown along vertical
axis.
Any point where the phase diagram (graph) intersects the horizontal axis
is called the steady state solution of given differential equation. The
stability of the obtained solution can be analyzed in two ways: (1) by
arrows of motion, and (2) by using stability theorem.
Step 3/8
Results of application of Phase diagram and Theorem of Stability
Stability with Arrows of Motion: At the point where the graph of the
equation is above the horizontal axis, is positive and
therefore y is increasing, and at the point where graph of equation
is below the horizontal axis, is negative and therefore y is
decreasing.
To illustrate the behaviour of y, the arrows can be added along the
horizontal axis. The arrows will point to the right on any segment for
which the graph is above the axis and to the left on the segment for
which the graph is below the horizontal axis. The point at which arrows
from both sides point into it is the stable steady state (stable equilibrium)
point and the point from which arrows go outward is the point of
unstable state or unstable equilibrium.
Stability using Stability Theorem: Calculate the slope of the tangent to
the curve (phase diagram) at any point .
If slope of tangent at point , , the equilibrium at point
is stable.
If slope of tangent at point , , the equilibrium at point
is unstable.
Step 4/8
The objective is to draw phase diagram for the equation
and to conduct the qualitative analysis of the equation.
The steady state solution/s is obtained by setting and solving it
further algebraically as:
Then,
Thus and are the steady state solution of the given
differential equation. At these points the phase diagram of the equation
intersects horizontal axis.
Step 5/8
Now, determine critical point by setting and determine whether
the critical point is a maximum or minimum.
Now,
Then,
Hence, , is the critical point.
Step 6/8
Further, since . Therefore, at point there is relative
maximum. The phase diagram of the equation is shown in !gure here.
From the motion of Arrows:
The arrows move into point , therefore, the equilibrium at
is stable. The arrows move out of the point , therefore,
the equilibrium at is unstable.
It can be seen that if ever the value of y reaches less than zero, the value
of continues decreasing forever.
Step 7/8
From the theorem of stability:
At steady state point ,
Hence, the equilibrium at point is stable.
At steady state point ,
Hence, the equilibrium at point is unstable.
Step 8/8
Thus with the help of phase diagram and the theorem of stability, it has
been shown analytically that steady state equilibrium of given nonlinear,
!rst order differential equation at point is stable and at the
point unstable.
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Chapter 22.1, Chapter 22.1,
Problem 1E Problem 3E
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Textbook Sol…
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Mathematics for Economics | 3rd Edition
CH 22.1, 3EP (0)
Step-by-step solution
Show all steps
Step 1/8
Use a phase diagram and theorem of stability stated below to conduct
qualitative analysis of .
Theorem of stability: A steady state equilibrium of a nonlinear, !rst order
differential equation is stable if the derivative is negative at
that point and unstable if the derivative is positive at that point.
Step 2/8
There are many nonlinear !rst order differential equations derived for
dynamical situations in economics which cannot be solved explicitly as a
function of time. As an alternative it is possible to conduct qualitative
analysis for such equations with the help of phase diagram of that
equation. The phase diagram analysis is a method to illustrate steady
states of a differential equation and the behaviour of the solutions around
the steady states. The phase diagram of an equation is its graph having
values of y along horizontal axis and values of are shown along vertical
axis.
Any point where the phase diagram (graph) intersects the horizontal axis
is called the steady state solution of given differential equation. The
stability of the obtained solution can be analysed in two ways: (1) by
arrows of motion, and (2) by using stability theorem.
Step 3/8
Results of application of Phase diagram and Theorem of Stability
Stability with Arrows of Motion: At the point where the graph of the
equation is above the horizontal axis, is positive and
therefore y is increasing, and at the point where graph of equation
is below the horizontal axis, is negative and therefore y is
decreasing.
To illustrate the behaviour of y, arrows can be added along the horizontal
axis. The arrows will point to the right on any segment for which the
graph is above the axis and to the left on the segment for which the
graph is below the horizontal axis. The point at which arrows from both
sides point into it is the stable steady state (stable equilibrium) point and
the point from which arrows go outward is the point of unstable state or
unstable equilibrium.
Stability using Stability Theorem: Calculate slope of the tangent to the
curve (phase diagram) at any point .
If t slope of tangent at point , , the equilibrium at point
is stable.
If slope of tangent at point , , the equilibrium at point
is unstable.
Step 4/8
The objective is to draw phase diagram for the equation and to
conduct the qualitative analysis of the equation.
The steady state solution/s is obtained by setting and solving it
further algebraically as:
Thus and are the steady state solutions of the given
differential equation. At these points the phase diagram of the equation
intersects horizontal axis.
Step 5/8
Now, determine whether the critical point is a maximum or minimum.
For that, set .
Now,
Then,
Hence, , is the critical point.
Step 6/8
Further,
Therefore, at point there is relative minimum. The phase diagram of
the equation is shown in !gure here.
From the motion of arrows:
The arrows move into point , i.e. y converges to 0, therefore, the
equilibrium at is stable.
The arrows move out of the point , therefore, the equilibrium at
is unstable.
Step 7/8
From the theorem of stability:
At steady state point ,
This is unde!ned. But from the motion of arrows the equilibrium at point
is stable.
At steady state point ,
Hence, the equilibrium at point is unstable.
Step 8/8
Thus with the help of phase diagram and the theorem of stability, it has
been shown analytically that steady state equilibrium of given nonlinear,
!rst order differential equation at point is stable and at the point
steady state equilibrium is unstable as, from point , the
function continuously increases inde!nitely.
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Chapter 22.1, Chapter 22.1,
Problem 2E Problem 4E
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Textbook Sol…
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Mathematics for Economics | 3rd Edition
CH 22.1, 4EP (0)
Step-by-step solution
Show all steps
100% (1 rating) for this solution
Step 1/9
Use a phase diagram and theorem of stability stated below to conduct
qualitative analysis of .
Theorem of stability: A steady state equilibrium of a nonlinear, !rst order
differential equation is stable if the derivative is negative at
that point and unstable if the derivative is positive at that point.
Step 2/9
There are many nonlinear !rst order differential equations derived for
dynamical situations in economics which cannot be solved explicitly as a
function of time. As an alternative it is possible to conduct qualitative
analysis for such equations with the help of phase diagram of that
equation. The phase diagram analysis is a method to illustrate steady
states of a differential equation and the behaviour of the solutions around
the steady states. The phase diagram of an equation is its graph having
values of y along horizontal axis and values of are shown along vertical
axis.
Any point where the phase diagram (graph) intersects the horizontal axis
is called the steady state solution of given differential equation. The
stability of the obtained solution can be analyzed in two ways: (1) by
arrows of motion, and (2) by using stability theorem.
Step 3/9
Results of application of Phase diagram and Theorem of Stability
Stability with Arrows of Motion: At the point where the graph of the
equation is above the horizontal axis, is positive and
therefore y is increasing, and at the point where graph of equation
is below the horizontal axis, is negative and therefore y is
decreasing.
To illustrate the behaviour of y, arrows can be added along the horizontal
axis. The arrows will point to the right on any segment for which the
graph is above the axis and to the left on the segment for which the
graph is below the horizontal axis. The point at which arrows from both
sides point into it is the stable steady state (stable equilibrium) point and
the point from which arrows go outward is the point of unstable state or
unstable equilibrium.
Stability using Stability Theorem: Calculate that the slope of the tangent
to the curve (phase diagram) at any point .
If slope of tangent at point , , the equilibrium at point
is stable.
If slope of tangent at point , , the equilibrium at point
is unstable.
Step 4/9
The objective is to draw phase diagram for the equation and to
conduct the qualitative analysis of the equation.
The steady state solution/s is obtained by setting and solving it
further algebraically as:
Thus and are the steady state solutions of the given
differential equation. At these points the phase diagram of the equation
intersects horizontal axis.
Step 5/9
Now, determine critical point by setting and check whether the
critical point is a maximum or minimum.
Now,
Then,
So, , is the critical point.
Step 6/9
Further,
Step 7/9
Therefore, at point , there is a relative maxima. The phase diagram
of the equation is shown in !gure here.
From Motion of Arrows:
The arrows move into the point , therefore, the equilibrium at is
stable. The arrows move out of the point , therefore, the equilibrium
at is unstable.
Step 8/9
From the theorem of stability:
At steady state point ,
This is unde!ned. But from the motion of arrows the equilibrium at point
is stable.
At steady state point ,
Hence the equilibrium at point is stable.
Step 9/9
Thus with the help of phase diagram and the theorem of stability, it has
shown analytically that steady state equilibrium of given nonlinear, !rst
order differential equation at point is stable and at the point
steady state equilibrium is unstable.
Was this solution helpful? 1 0
Chapter 22.1, Chapter 22.1,
Problem 3E Problem 5E
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0 questions left - Renews March 24, 2024
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Mathematics for Economics | 3rd Edition
CH 22.1, 5EP (0)
Step-by-step solution
Show all steps
Step 1/7
Quantity demand in a market is given by and quantity supplied
is given by
Here, price is adjusted according to , where is a
constant.
The objective is to conduct a qualitative analysis of the dynamics.
Step 2/7
The given nonlinear !rst order differential equations derived for market
price dynamics cannot be solved explicitly as a function of time. As an
alternative it is possible to conduct qualitative analysis for such equations
with the help of phase diagram of that equation. The phase diagram
analysis is a method to illustrate steady states of a differential equation
and the behaviour of the solutions around the steady states. The phase
diagram of an equation is its graph having values of y along horizontal
axis and values of are shown along vertical axis.
Any point where the phase diagram (graph) intersects the horizontal axis
is called the steady state solution of given differential equation. The
stability of the obtained solution can be analysed in two ways: (1) by
arrows of motion, and (2) by using stability theorem.
Theorem of stability: A steady state equilibrium of a nonlinear, !rst order
differential equation is stable if the derivative is negative at
that point and unstable if the derivative is positive at that point.
Step 3/7
Results of application of Phase diagram and Theorem of Stability
Stability with Arrows of Motion: At the point where the graph of the
equation is above the horizontal axis, is positive and
therefore y is increasing, and at the point where graph of equation
is below the horizontal axis, is negative and therefore y is
decreasing.
To illustrate the behaviour of y, arrows can be added along the horizontal
axis. The arrows will point to the right on any segment for which the
graph is above the axis and to the left on the segment for which the
graph is below the horizontal axis. The point at which arrows from both
sides point into it is the stable steady state (stable equilibrium) point and
the point from which arrows go outward is the point of unstable state or
unstable equilibrium.
Stability using Stability Theorem: It can be observed that the slope of the
tangent to the curve (phase diagram) at any point .
If t slope of tangent at point , , the equilibrium at point
is stable.
If slope of tangent at point , , the equilibrium at point
is unstable.
Step 4/7
The objective is to conduct the qualitative analysis of the equation.
, , and or .
The steady state solution/s is obtained by setting and solving it
further algebraically as:
Thus is the steady state solution of the price differential equation.
The phase diagram of the equation intersects horizontal axis at this point.
Step 5/7
Now, determine whether the critical point is a maximum or minimum.
For that, set .
Now,
Then,
Thus, , is the critical point.
Further,
Therefore, at point , there is relative maxima. The phase
diagram of the equation (for ) is shown in !gure here.
From the motion of arrows:
The arrows move into the point , therefore, the equilibrium at
is stable.
Step 6/7
From the theorem of stability:
At steady state point ,
Then,
Hence the steady state equilibrium at point is stable.
Thus with the help of phase diagram and the theorem of stability, it has
shown analytically that steady state equilibrium of given nonlinear, !rst
order differential equation at point is stable.
Step 7/7
Thus, at steady state equilibrium the stable price units, and
quantity demanded units and supply against demand
units. Since the demand is equal to supply, hence there is
price equilibrium.
Was this solution helpful? 0 0
Chapter 22.1, Chapter 22.1,
Problem 4E Problem 6E
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0 questions left - Renews March 24, 2024
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Mathematics for Economics | 3rd Edition
CH 22.1, 6EP (0)
Step-by-step solution
Show all steps
Step 1/9
Consider that y represents the stock of carbon dioxide and let (a
constant) represent the !ow of carbon dioxide emissions that come from
industrial activity.
Suppose that the dynamics of y are given by
Here, the term represents the earth’s capacity to remove the carbon
dioxide from the atmosphere and allow its absorption elsewhere (i.e., in
trees, oceans).
The objective is to conduct the qualitative analysis of the model, "rst for
the case and then for the case .
Step 2/9
The given nonlinear "rst order differential equations derived for market
price dynamics cannot be solved explicitly as a function of time. As an
alternative it is possible to conduct qualitative analysis for such equations
with the help of phase diagram of that equation. The phase diagram
analysis is a method to illustrate steady states of a differential equation
and the behaviour of the solutions around the steady states. The phase
diagram of an equation is its graph having values of y along horizontal
axis and values of are shown along vertical axis.
Any point where the phase diagram (graph) intersects the horizontal axis
is called the steady state solution of given differential equation. The
stability of the obtained solution can be analyzed in two ways: (1) by
arrows of motion, and (2) by using stability theorem.
Theorem of stability: A steady state equilibrium of a nonlinear, "rst order
differential equation is stable if the derivative is negative at
that point and unstable if the derivative is positive at that point.
Step 3/9
Results of application of Phase diagram and Theorem of Stability
Stability with Arrows of Motion: At the point where the graph of the
equation is above the horizontal axis, is positive and
therefore y is increasing, and at the point where graph of equation
is below the horizontal axis, is negative and therefore y is
decreasing.
To illustrate the behaviour of y, arrows can be added along the horizontal
axis. The arrows will point to the right on any segment for which the
graph is above the axis and to the left on the segment for which the
graph is below the horizontal axis. The point at which arrows from both
sides point into it is the stable steady state (stable equilibrium) point and
the point from which arrows go outward is the point of unstable state or
unstable equilibrium.
Stability using Stability Theorem: It can be observed that the slope of the
tangent to the curve (phase diagram) at any point .
If slope of tangent at point , , the equilibrium at point
is stable.
If slope of tangent at point , ,the equilibrium at point
is unstable.
Step 4/9
The objective is to conduct the qualitative analysis of the equation.
, ( a constant).
The steady state solution/s is obtained by setting and solving it
further algebraically as:
Since and . Hence two steady state solutions of equation
are and . The phase diagram of the equation
intersects horizontal axis at this point.
Further, by setting determine the critical point and check whether
the critical point is a maximum or minimum.
Thus is the critical point of the given differential equation.
Step 5/9
Now,
So it cannot decided whether is minimal or maxima. So rely on the
phase diagram to solve the nonlinear differential equation. The phase
diagrams of the equation for arbitrarily chosen and for
are shown in "gures here.
Step 6/9
From the motion of arrows:
For , the points of steady state equilibrium are,
For , the points of steady state equilibrium are,
Step 7/9
From the theorem of stability:
At steady state points ,
Then,
Now,
Thus is unstable steady state equilibrium point, and is
stable steady state equilibrium.
Step 8/9
At steady state points ,
And,
Thus is unstable steady state equilibrium point, and is
stable steady state equilibrium.
Step 9/9
Thus, from the phase diagram Figure (a), it can be seen that for
, at the steady state point (in unit) the rate of
emission of carbon dioxide from industries becomes stable subject to
the maximum rate of emission of carbon dioxide is 3 units.
Similarly, from the phase diagram Figure (b), it can be seen that for
, at the steady state point (in unit) the rate of
emission of carbon dioxide from industries becomes stable subject to
the maximum rate of emission of carbon dioxide is 3 units.
Was this solution helpful? 1 1
Chapter 22.1, Chapter 22.2,
Problem 5E Problem 1E
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0 questions left - Renews March 24, 2024
Enter question
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