Mathematical method for economists (BØK108)

Content

The course is an introduction to mathematical methods applied to economic problems. First, the students will become familiar with a number of different functions, such as linear, quadratic and exponential functions. The students will then learn how to analyze these functions, and not least how to find the extreme points (extrema). This is then linked to economic examples, where the students must, among other things, find cost minimizing quantity, profit maximizing quantity and utility-maximizing quantity. They also learn to optimize functions with two variables and with an additional constraint, which requires knowledge of partial differentiation and classification of stationary points. Series and financial mathematics are the last part of the course, and the students get to know, among other things, the sum sign, series, interest calculation, loans, and annuities.

Learning outcome

Knowledge

After completing this course, the student is expected to have knowledge of

• Mathematical methods needed to answer various financial questions

• Basic mathematics such as algebra, fractions, percentages, powers, and systems of equations

• Different functional forms (linear, quadratic, logarithmic, exponential, etc.)

• How functions can be analyzed, including what it means to look at the function's limit values and what you achieve

by deriving functions

• Marginal considerations on economic issues

• Functions with several variables, and how to optimize such functions

• The sum sign, sequences, interest rates calculations, different types of loans, present value calculations, and annuities

Skills

After completing the course, students should be able to:

• Solve basic mathematical problems

• Calculate different functional forms

• Analyze various functions, including showing asymptotes, zero points, intersections, and derivative functions to find

extreme points (extrema) and turning points

• Use marginal considerations to analyze various economic issues and demonstrate, for example, cost optimizing

quantity, profit optimizing quantity, and utility-maximizing quantity

• Partially derive functions with several variables, classify stationary points and optimize functions with constraints

• Calculate the sum sign, sequences, interest rates, different types of loans, present values, and annuities in various financial contexts

Required prerequisite knowledge

Recommended prerequisites

Exam

Coursework requirements

Mandatory presence of at least 50% in lectures (eller at least 50% presence in lectures)

3 submissions, where at least 2 must be submitted and passed

Course teacher(s)

Course teacher:

Course coordinator:

Study Program Director:

Method of work

Learning in the course takes place through a combination of lectures, problem-solving seminars, and independent work. There will be 4-5 weekly hours of lecture. In addition, student assistants will guide students with task solving at various times during the week.

Open for

Course assessment

Literature