ECON1003 Quantitative Methods in Economics

Tutorial 10 (Wk12): Integration and areas, Differential equation,

Matrices

Carlton Li

School of Economics
The University of Sydney

Credit to Dr. Jiemai Wu for her excellent class notes in Matrix algebra

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Tutorial Outline

1 Integration and areas

2 Differential Equations

3 Matrix algebra

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Definite integrals: Area under the curve

Z b
f (x) dx = [Area above x axis] − [Area below x axis]
a

One more step after integration: evaluate the integrated function

F (b) − F (a).
No need to keep integration constant c because the arbitrary constant
will be subtracted out.
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Definite integrals: Area between two curves

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Economic surplus

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Progress Exercises 8.4, Q10
Sketch the supply function P = Q 2 + 4 then shade the producer surplus at
the given value of Q = 5. Calculate the producer surplus correct to two
decimal places.

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Progress Exercises 8.4, Q10
Sketch the supply function P = Q 2 + 4 then shade the producer surplus at
the given value of Q = 5. Calculate the producer surplus correct to two
decimal places.

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Progress Exercises 8.4, Q17

For the demand function 4 − 0.1Q = ln P, calculate the consumer surplus

at the indicated value of P = 20.

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Progress Exercises 8.4, Q17

For the demand function 4 − 0.1Q = ln P, calculate the consumer surplus

at the indicated value of P = 20.

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Tutorial Outline

1 Integration and areas

2 Differential Equations

3 Matrix algebra

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Differential Equations

In this case, it is nothing different from finding the original function with
the derivative.

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Progress Exercises 8.6: Q1
The marginal cost function for a good is given by the equation
MC = −Q 2 + 80Q. (a) Write down the differential equation which relates
total cost to marginal costs. (b) Find the equation of the total cost
function if fixed costs are 500. (c) Calculate the cost of producing
successive units from Q = 3 to Q = 12.

Carlton Li (The University of Sydney) ECON1003 Qnt. Methods Economics 13 / 37

Progress Exercises 8.6: Q1
The marginal cost function for a good is given by the equation
MC = −Q 2 + 80Q. (a) Write down the differential equation which relates
total cost to marginal costs. (b) Find the equation of the total cost
function if fixed costs are 500. (c) Calculate the cost of producing
successive units from Q = 3 to Q = 12.

dTC
= MC
dQ Z
TC = MC dQ
Z
= −Q 2 + 80Q dQ

Q3 Q2
=− + 80 × +C
3 2
Q3
=− + 40Q 2 + C
3
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 dy
Differential Equations - dx = f (x)g (y )

In this case, one can

1 collect all the terms with a y to the left-hand side;
2 collect all the terms with an x to the right-hand side;
3 integrate both sides.

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Progress Exercises 8.8, Q2

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Progress Exercises 8.8, Q2

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Tutorial Outline

1 Integration and areas

2 Differential Equations

3 Matrix algebra

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Progress Exercises 9.2, Q1

Å ã Å ã Å ã
1 −4 4 3 5 −1 −1
A= ,B = ,C =
0 −9 −7 0 12 0 2

What are the dimensions of the matrices?

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Progress Exercises 9.2, Q1

Å ã Å ã Å ã
1 −4 4 3 5 −1 −1
A= ,B = ,C =
0 −9 −7 0 12 0 2

What are the dimensions of the matrices?

A: 2 by 2
B: 2 by 2
C : 2 by 3

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Examples:

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Progress Exercises 9.2, Q1

Å ã Å ã Å ã
1 −4 4 3 5 −1 −1
A= ,B = ,C =
0 −9 −7 0 12 0 2

Calculate, if possible: (i) CB

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Progress Exercises 9.2, Q1

Å ã Å ã Å ã
1 −4 4 3 5 −1 −1
A= ,B = ,C =
0 −9 −7 0 12 0 2

Calculate, if possible: (i) CB

(i) C is a 2 by 3 matrix and B is a 2 by 3 matrix. Multiplication in this

order is not possible because the num. of columns of C and the num. of
rows of B do not match.

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Progress Exercises 9.2, Q1

Å ã Å ã Å ã
1 −4 4 3 5 −1 −1
A= ,B = ,C =
0 −9 −7 0 12 0 2

Calculate, if possible: (ii) C + 5I

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Progress Exercises 9.2, Q1

Å ã Å ã Å ã
1 −4 4 3 5 −1 −1
A= ,B = ,C =
0 −9 −7 0 12 0 2

Calculate, if possible: (ii) C + 5I

(ii) is not possible because the identity matrix I is a square matrix while C
is rectangular - they do not have the same dimensions.

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Progress Exercises 9.2, Q1
Å ã Å ã Å ã
1 −4 4 3 5 −1 −1
A= ,B = ,C =
0 −9 −7 0 12 0 2
Calculate, if possible: (iii) C T A

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