Course Outline
Department of Economics
School of Business and Economics
ECON 3200-3
Introduction to Mathematical Economics (3,0,0)
Calendar Description
Students examine the mathematical methods and tools most commonly used in analyzing
economic problems. Topics include a review of set theory, functions, and limits; linear models
and matrix algebra; application of single and multivariable calculus; unconstrained and
constrained optimization; integration and difference and differential equations; application of
dynamic analysis; and linear and non-linear programing.
Educational Objectives/Outcomes
Upon completing this course, students will be able to:
1. Exhibit a sound understanding of mathematical technique studied.
2. Formulate economic problems in mathematical terms.
3. Construct a mathematical model given the information.
4. Demonstrate the application of linear algebra.
5. Solve constraint optimization problems.
6. Apply derivatives to solve economic problems.
7. Perform comparative statics analysis with and without optimization.
8. Compute dynamic market price using difference and differential equations.
Prerequisites
ECON 1900; ECON 1950; MATH 1170 or equivalent
Co-requisites
Texts/Materials
Chiang, A, C. and Wainwright, K., Fundamental Methods of Mathematical Economics,
McGraw-Hill Irwin, New York, 2005.
Student Evaluation
Revised May 2014 Page 1
Participation 0-20%
Assignments/quizzes 0-20%
Project 0-25%
Midterm(s) 30-60%
Course Topics
1. Review of Some Introductory Concepts
Math versus non-math economics
Math economics versus. econometrics
Real number system
A few aspects of logic
Essentials of set theory
Types of functions
Properties of functions
2. Linear Models and Matrix Algebra
Matrix and vector
Matrix operations
Geometric interpretation of vectors
Different types of matrices
Transpose and inverse matrix
Finding inverse matrix
Cramer’s rule
Applications
3. Comparative Statics with Specific Function and the Derivative
Derivative and slope
The concept of limit
Rules of differentiation
Partial differentiation
Applications
4. Comparative Statics with General Function
Derivative and differentials
Total differentials and their rules
Total derivatives
Derivative of implicit function
Applications
5. Optimization with One Choice Variable
First derivative test
Second derivative test
Applications
Revised May 2014 Page 2
General function
Exponential function
Logarithmic function
6. Optimization with more than one Choice Variables
Necessary condition
Sufficient condition
Concavity and convexity with respect to second order condition
Unconstrained optimization
Constrained optimization
Applications in utility and production
7. Dynamic Analysis and Integration
Indefinite integrals and their rules
Definite integrals and their properties
Applications
8. First Order Difference Equations
Solving first order difference equations
Dynamic stability of equilibrium
Cobweb model
9. First Order Differential Equations
First order linear differential equations with constant coefficient and constant term
Dynamics of market price
Variable coefficient and variable term
Exact differential equations
Applications
10. Linear and Non-linear Programming
Duality theory
Economic interpretations
Complementary slackness
Kuhn-Tucker conditions
Methods for Prior Learning Assessment and Recognition
As per TRU policy.
Attendance Requirements – Include if different from TRU Policy
As per TRU policy.
Special Course Activities – Optional
Revised May 2014 Page 3
Use of Technology – Optional
Revised May 2014 Page 4
