School of Economics

# Mathematical Economics (L11121)

 Credits 15 1 Dr M Dahm Autumn 1 x 2 hour exam A-level Mathematics or equivalent Lectures - 3 per week, 1 hour duration Tutorials - 1 per week, 1 hour duration

## Summary

The module is an introduction to the mathematical methods most commonly used in analysing economic problems. The core topics of the module are univariate calculus, linear algebra, multivariate calculus, static optimisation (unconstrained and constrained) and comparative statics. Economic applications from microeconomics and macroeconomics will be discussed for each mathematical topic

1. Introduction to Mathematical Economics; Single variable calculus; Differentiation; Integration - Applications: Elasticity; Consumer and producer surplus
2. Single variable optimisation; Comparative statics - Applications: Profit, production, revenue maximisation; Cost minimisation
3. Linear Algebra. Matrices. Systems of linear equations - Applications: Macroeconomic output-consumption-investment models; Multiple markets; Input-output models
4. Multivariate Calculus. Functions of several variables - Applications: Production and utility functions
5. Tools for Comparative Statics - Applications: Supply and demand; Macroeconomic models
6. Multivariable optimisation - Applications: Consumer choice, Cost minimisation, Profit maximisation

## Aims

The aim of the module is to provide students with the mathematical tools required for economic analysis at undergraduate level. Emphasis will be placed in developing ability in translating economic problems that students will encounter in their economics modules, into mathematical models, and on solving these models.

At the end of the course students should be able to:

• Exhibit a sound understanding of mathematical techniques discussed
• Formulate economic problems in mathematical terms
• Apply the relevant tools for analysing economic problems

## Learning outcomes

• Show understanding of relevant mathematical and statistical techniques
• Work with abstract concepts and in a context of generality
• Reason logically and work analytically
• Perform with high levels of accuracy
• Select and apply appropriate techniques to solve problems
• Apply mathematical, statistical and graphical techniques in an appropriate manner
• Analyse and solve complex problems accurately

### Main text

• Sydsaeter, K., Hammond, P. J. and Strom, A. (2012) Essential Mathematics for Economic Analysis, 4th edition, Pearson.  (Previous editions of the book are also fine, as most of the section and exercise numbers are the same)

### Other useful texts

• Dowling, E.T. (2001) Schaum's Outline of Introduction to Mathematical Economics, 3rd edition, McGraw Hill.
• Hoy, M., Livernois, J., McKenna, C., Rees, R., Stengos, T. (2001) Mathematics for Economics, 2nd edition, MIT Press

## School of Economics

Sir Clive Granger Building
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Nottingham, NG7 2RD

telephone: +44 (0)115 951 5620 (Undergraduate admissions: +44 (0)115 951 5617; Masters admissions: +44 (0)115 823 2516; PhD Admissions: +44 (0)115 951 5250)
fax: +44 (0) 115 951 4159
email: economics-enquiries@nottingham.ac.uk