Quantatitative Method

by
Purbita Jana
ii
Contents

Introduction 1

1 Differential and Integral Calculus 1

iv CONTENTS
Chapter 1

Differential and Integral

Calculus

Definition 1.0.1 (Cartesian Product). Let A and B be non-empty sets. The

Cartesian product of A and B is the set of all ordered pairs and denoted by
A × B, i.e.,
A × B = {(a, b) | a ∈ A, b ∈ B}.

Example 1.0.1. Let A = {1, 4} and B = {1, 2, 5} then

A × B = {(1, 1), (1, 2), (1, 5), (4, 1), (4, 2), (4, 5)}.

Definition 1.0.2 (Relation). Let A and B be two sets. A relation, say R,

between A and B is a subset of A × B.

Definition 1.0.3 (Reflexive relation). A relation R on A is said to be reflexive

if and only if aRa (or (a, a) ∈ R), for all a ∈ A.

Example 1.0.2. ≤ on N is a reflexive relation.

Example 1.0.3. A = {1, 2, 3}, R = {(1, 1), (1, 2), (2, 2), (3, 1), (3, 3)}
2 Differential and Integral Calculus

Definition 1.0.4 (Symmetric relation). A relation R on A is said to be sym-

metric if and only if aRb =⇒ bRa, for all a, b ∈ A.

Example 1.0.4. A = {1, 2, 3},

R = {(1, 1), (1, 2), (1, 3), (2, 1), (2, 2), (3, 1), (3, 3)}.

Definition 1.0.5 (Antisymmetric relation). A relation R on A is said to be

antisymmetric if and only if aRb and bRa =⇒ a = b, for all a, b ∈ A.

Example 1.0.5. ≤ on N is an antisymmetric relation.

Definition 1.0.6 (Transitive relation). A relation R on A is said to be tran-

sitive if and only if aRb and bRc =⇒ aRc, for all a, b, c ∈ A.

Example 1.0.6. ≤ on N is a transitive relation.

Example 1.0.7. A = {1, 2, 3}, R = {(1, 1), (1, 2), (2, 2), (3, 1), (3, 3)}

Definition 1.0.7 (Equivalence relation). A relation R on a set A is said to be

equivalence if R is reflexive, symmetric and transitive.

Definition 1.0.8 (Partially ordered set or poset). (A, R) is said to be a poset

if R(⊆ A × A) is reflexive, antisymmetric and transitive.

Definition 1.0.9 (Function). Let A and B be two non-empty sets. A function

f from A to B is a relation that assigns each element x of A, an unique element
y in B. A is said to be the domain of f and B is said to be the codomain of f
and denoted by f : A → B.

The set {f (x) | x ∈ A} is said to be the range of f denoted by f (A).

Whereas {x | f (x) = y} is the preimage set of y ∈ B under f : A → B and is
denoted by f −1 (y).
3 Differential and Integral Calculus

Definition 1.0.10 (injective function). A function f : A → B is said to be

injective if x1 ̸= x2 =⇒ f (x1 ) ̸= f (x2 ).

Definition 1.0.11 (surjective function). A function f : A → B is said to be

surjective if for any y ∈ B there exist x ∈ A such that y = f (x).

Definition 1.0.12 (bijective function). A function f : A → B is said to be

bijective if it is injective and surjective.

Exercise 1. Check whether following fuctions are injective, surjective and bi-
jective.

1. f (x) = 2x

2. f (x) =| x |

3. f (x) = x + 1.

Two functions f and g are equal if f and g have same domain D and
f (x) = g(x) for all x ∈ D.
Note: A function f : X → R is called a real valued function.

Exercise 2. Draw the graph of the function f : R → R where

1. f (x) = c

1
2. f (x) = x

p
3. f (x) = |x|

4. f (x) =| x |

 |x| ,

x ̸= 0
x
5. f (x) =
 0,

otherwise.
4 Differential and Integral Calculus

Definition 1.0.13 (Composition). Two real valued functions f : D → R and

g : E → R are composible if f (D) ⊆ E ⊆ R. Composition of f and g is a
function from D to R and denoted by g ◦ f , i.e. g ◦ f : D → R such that
g ◦ f (x) = g(f (x)), for all x ∈ D.

Exercise 3. Find the composition of f : R → R and g : R → R where

1. f (x) = 3x, g(x) = 2x2 − 5;

√
2. f (x) = e4x , g(x) = x;

3. f (x) = sin(x), g(x) = x1 ;

4. f (x) = 2x, g(x) = sin(x);

5. f (x) = x2 , g(x) = ex ;

6. f (x) = −x, g(x) = ln(x);

7. f (x) = x1 , g(x) = 2 sin(x);

Definition 1.0.14 (Inverse function). Let f : X → Y . Inverse of f is a

relation from Y to X such that f −1 (y) = {x ∈ X | y = f (x)}. If f is bijective
then f −1 is a function from Y to X where f −1 (y) = x such that y = f (x).

Let f : D → R and g : D → R then

1. (f + g)(x) = f (x) + g(x)

2. (kf )(x) = kf (x), k ∈ R

3. (f · g)(x) = f (x) · g(x)

f f (x)
4. g
(x) = g(x)
, g ̸= 0.
5 Differential and Integral Calculus

Definition 1.0.15 (Monotone function). f : D → R is said to be monotoni-

cally increasing on D if x1 , x2 ∈ D, x1 < x2 =⇒ f (x1 ) ≤ f (x2 ).
f : D → R is said to be monotonically decreasing on D if x1 , x2 ∈ D,
x1 < x2 =⇒ f (x2 ) ≤ f (x1 ).
f : D → R is said to be strictly increasing on D if x1 , x2 ∈ D, x1 < x2 =⇒
f (x1 ) < f (x2 ).
f : D → R is said to be strictly decreasing on D if x1 , x2 ∈ D, x1 < x2 =⇒
f (x2 ) < f (x1 ).

Exercise 4. Check whether f : R → R is monotonically increasing, monoton-

ically decreasing, strictly increasing or strictly decreasing where

1. f (x) = 1 − x

2. f (x) = x2

 |x| ,

x ̸= 0
x
3. f (x) =
 0,

otherwise.

Definition 1.0.16 (Even and odd function). A function f : R → R is said to

be even function if f (−x) = f (x) and odd function if f (−x) = −f (x).

Definition 1.0.17 (Bounded function). A function f : D → R is said to be

bounded above if there exist a ∈ R such that f (x) ≤ a, for all x ∈ D and
bonded below if there exist b ∈ R such that b ≤ f (x), for all x ∈ R. Whereas
f is said to be bonded if it is both bounded above and bounded below, i.e., there
exist a, b ∈ R, such that b ≤ f (x) ≤ a, for all x ∈ D.

Let f : R → R where

1
1. f (x) = 1+x2

2. f (x) = ex .
6 Differential and Integral Calculus

Check which of them are bounded.

Definition 1.0.18. Two sets A and B are equipotent if and only if there exist
a bijection f : A → B.

Definition 1.0.19 (enumerable and countable set). A set S is said to be enu-

merable if S is equipotent to N and countable if it is either finite of enumerable.

Exercise 5. Show that the set of integers is a ennumerable set.

Definition 1.0.20 (sequence). A real sequence is a function from N to R and

is denoted by {f (n)} and in short it is denoted by {xn }.

Example 1.0.8. • {1, 2, 3, 4, · · · }. One may represent the sequence by

{xn } where xn = n.

• {1, 12 , 13 , · · · }. One may represent the sequence by {xn } where xn = n1 .

• {1, −1, 1, −1, · · · }.

Definition 1.0.21 (limit of a sequence). Let {xn } be a sequence and l ∈ R.

Then xn → l as n → ∞ i.e.,
lim xn = l
n→∞

means that given ϵ > 0 there exist m ∈ N such that | xn − l |< ϵ for all n ≥ m.

Definition 1.0.22 (limit point of a set). Let S ⊆ R. A point c ∈ R is said

to be a limit point or accumulation point of S if for any δ > 0, (c − δ, c + δ)
contains a point in S other than c i.e., ((c − δ, c + δ) \ {c}) ∩ S ̸= ∅.

Definition 1.0.23 (limit of a function). Let f : D → R and c be a limit point

of D. A real number l is said to be the limit of f as x going to c ∈ R if
and only if for given ϵ > 0 there exist δ > 0 such that | f (x) − l |< ϵ for all
x ∈ ((c − δ, c + δ) \ {c}) ∩ D.
7 Differential and Integral Calculus

Exercise 6. Prove that

lim (x + 2) = 4.
x→2

Proof. To show this, for given ϵ > 0 we need to find δ > 0 such that whenever
x ∈ (2−δ, 2+δ)\{2} then | f (x)−4 |< ϵ. Now | f (x)−4 |=| x+2−4 |=| x−2 |.
Hence δ = ϵ will work good to serve our purpose as x ∈ (2 − δ, 2 + δ) \ {2}
implies | f (x) − 4 |≤ ϵ.

Note that
sin(x)
lim =1
x→0 x
and we will use this in the sequel.

Definition 1.0.24 (Continuity). Let f : R → R is continuous at c ∈ R if for

given ϵ > 0 there exist δ > 0 such that | f (x) − f (c) |< ϵ whenever | x − c |< δ.
Moreover, f is said to be continuous if f is continuous at all points of R.

Definition 1.0.25 (Differentiation). Let f : R → R. f is said to be differen-

tiable at a point c ∈ R if

f (c + h) − f (x)
lim
h→0 h
df
exist. Derivative of f is denoted by f ′ (c) or dx
(c) and

df f (c + h) − f (x)
(c) = lim .
dx h→0 h

Moreover, f is said to be differentiable if f is differentiable at all points of R.

Exercise 7. Let f, g : R → R be differentiable functions. Then calculate

d
1. dx
(f g)

d
2. dx
(c), c∈R
8 Differential and Integral Calculus

d
3. dx
(kf ), k∈R

d f
4. ( ),
dx g
for g ̸= 0

d
5. dx
(f + g).

Proof. As f , g are differentiable so we have

df f (x + h) − f (x)
= lim
dx h→0 h

and
dg g(x + h) − g(x)
= lim
dx h→0 h
1.

d (f g)(x + h) − (f g)(x)
(f g) = lim
dx h→0 h
f (x + h)g(x + h) − f (x)g(x)
= lim
h→0 h
f (x + h)g(x + h) − f (x)g(x + h) + f (x)g(x + h) − f (x)g(x)
= lim
h→0 h
(f (x + h) − f (x))g(x + h) + f (x)(g(x + h) − g(x))
= lim
h→0 h
(f (x + h) − f (x))g(x + h) f (x)(g(x + h) − g(x))
= lim + lim
h→0 h h→0 h
f (x + h) − f (x) g(x + h) − g(x)
= lim g(x + h) + lim f (x)
h→0 h h→0 h
f (x + h) − f (x) g(x + h) − g(x)
= g(x) lim + f (x) lim
h→0 h h→0 h
df dg
= g(x) + f (x) .
dx dx

Rest proofs are left for readers.

Exercise 8. Using definition find the derivative of the function f : D → R

where D ⊆ R is the domain where the following functions are defined.

1. f (x) = sin(x)
9 Differential and Integral Calculus

2. f (x) = cos(x)

3. f (x) = tanx

4. f (x) = x

5. f (x) = xm , m ∈ N

6. f (x) = ax , a > 0

7. f (x) = lnx

8. f (x) = emx , m ∈ N.

Higher order derivative

Applications of the concept of derivative

Increasing and decreasing at a point: A function f : R → R is said to be

increasing at a point a if f ′ (a) > 0 and decreasing at a point a if f ′ (a) < 0. A
function f : R → R is said to be increasing in an interval, say I, if f ′ (x) > 0
for all x ∈ I and decreasing in I if f ′ (x) < 0, for all x ∈ I.
It is to be noted that the intervals in R are looks like the following: (a, b),
(−∞, b), (a, ∞), (a, b], (−∞, b], [a, b), [a, ∞), [a, b], where a, b ∈ R.

Exercise 9. Find the intervals in which the function f (x) is (i) increasing,
(ii) decreasing.

Exercise 10. Test whether the function f (x) = x2 − 6x + 3 is increasing in

[4, 6].

Maxima and Minima by second derivative method: Let f : R → R.

• f has maximum value at x if f ′ (x) = 0 and f ′′ (x) < 0.

10 Differential and Integral Calculus

• f has minimum value at x if f ′ (x) = 0 and f ′′ (x) > 0.

Exercise 11. Find the points where the following functions has maxima and
minima.

1. f (x) = x3 − 3x + 1;

1
2. f (x) = x + x+1
;

3. f (x) = (x + 3)2 − (x − 2)2 .

Cost function: The total cost of producing x units of a product is known as

cost function and is denoted by C(x). It has two components, namely fixed
cost and variable cost. The cost that remains same even when no production
is made is the fixed cost. Therefore C(0), i.e., putting x = 0 gives the fixed
cost.
Total Cost C(x)
Average cost(AC) = =
Number of units produced x
Variable Cost C(x) − C(0)
Average variable cost(AV C) = =
Number of units produced x
dC
Marginal cost(AM ) = .
dx
Revenue function: The total revenue or total selling price obtained from the
sell of x units of a product is known as revenue function and is denoted by
R(x).
R(x)
Average revenue =
x
dR
Marginal revenue = .
dx
Profit function: Profit function is the profit from selling x units of a product
and denoted by P (x). Hence P (x) = R(x) − C(x).
When P (x) = 0 then one may notice that there is no loss, no gain and the
point for which P (x) = 0 is known as break-even point.
11 Differential and Integral Calculus

Exercise 12. For a manufacturer of dry cells, the daily cost (C) of production
for x cells is given by

C(x) = (2.05x + 550).

If the price of a cell be Rs.3 determine minimum number of cells those must
be produced and sold daily to ensure no loss.

Exercise 13. The daily cost of production C for x units of an assembly by

C(x) = Rs.(12.5x + 6400)

1. If each unit is sold for Rs.25, determine the minimum number of units
that should be produced and sold to ensure no loss.

2. If the selling price is reduced by Rs.2.50 per unit, what would be the
break-even point?

3. If it is known that 500 units can be sold daily, what price per unit should
be changed to guarantee no loss?

Exercise 14. A firm produces x units of output at a total cost of Rs.(300x −

10x2 + 13 x3 ). Find

1. output at which marginal cost is minimum,

2. output at which average cost is minimum and

3. output at which average cost is equal to marginal cost.

The demand function of a monopolist is given by p = 1500 − 2x − x2 . Find the

marginal revenue for any level of output x. Also find marginal revenue when
x = 10.
12 Differential and Integral Calculus

Functions of several variables

Now we will study functions of several variables, in which we study continuity,

differentiability from Rn to R, and their applications.
In calculus of single variable, we had seen that the concept of convergence of
sequence played an important role, especially, in defining limit and continuity
of a function, and deriving some properties of R and properties of continuous
functions. This motivates us to start with the notion of convergence of a
sequence in Rn . For simplicity, we consider only R2 or R3 . General case is
entirely analogous.
Convergence of a sequence : Let Xn = (x1,n , x2,n , x3,n ) ∈ R3 . We
say that the sequence (Xn ) is convergent if there exists X0 ∈ R3 such that
∥Xn − X0 ∥ → 0 as n → ∞. In this case we say that Xn converges to X0 and
we write Xn → X0 .
Note that corresponding to a sequence {Xn }, Xn = (x1,n , x2,n , x3,n ), there
are three sequences {x1,n }, {x2,n } and {x3,n } in R, and vice-versa. Thus the
properties of {Xn } can be completely understood in terms of the properties of
the corresponding sequences {x1,n }, {x2,n } and {x3,n } in R. For example,
(i) Xn → X0 in R3 ⇔ the coordinates xi,n → xi,0 for every i = 1, 2, 3 in R.
(ii) {Xn } is bounded (i.e., there exist M such that ∥Xn ∥ ≤ M for all n) ⇔
each sequence {xi,n }, i = 1, 2, 3, is bounded.
In case of a sequence in R, to define the notion of convergence or bound-
edness, we use | | in place of ∥ ∥, hence it is clear how we generalized the
concept of convergence or boundedness of a sequence in R1 to R3 . Moreover,
it is also now clear how to define the concepts of limit and continuity of a
function f : R3 → R at some point X0 ∈ R3 .
Limit and Continuity :
(i) We say that L is the limit of a function f : R3 → R at X0 ∈ R3 (and
13 Differential and Integral Calculus

we write limX→X0 f (X) = L) if f (Xn ) → L whenever a sequence (Xn ) in R3 ,

Xn ̸= X0 , converges to X0 .
(ii) A function f : R3 → R is continuous at X0 ∈ R3 if limX→X0 f (X) =
f (X0 ).

sin2 (x−y)
Example 1.0.9. Consider the function f : R2 → R, where f (x, y) = |x|+|y|

when (x, y) ̸= (0, 0) and f (0, 0) = 0. We will show that this function is con-
|x−y|2
tinuous at (0,0). Note that |f (x, y) − f (0, 0)| ≤ |x|+|y|
≤ |x| + |y| (or |x − y| )
Therefore, whenever a sequence (xn , yn ) → (0, 0), i.e, xn → 0 and yn → 0, we
have f (xn , yn ) → f (0, 0). Hence f is continuous at (0, 0). In fact, this function
is continuous on the entire R2 .

Partial derivatives : The partial derivative of f : R3 → R with respect

to the first variable at X = (x, y, z) is defined by

∂f f (x + h, y, z) − f (x, y, z)
|X = lim
∂x h→0 h

provided the limit exists. Similarly

∂f f (x, y + k, z) − f (x, y, z)
|X = lim
∂x k→0 k

and
∂f f (x, y, z + l) − f (x, y, z)
|X = lim
∂x l→0 l
provided the limit exists.

∂u ∂u
Exercise 15. Find ∂x
and ∂y
for u(x, y) = x3 + 2y 2 − 3x2 y 5 − 7.

Exercise 16. Find f (1, 2), f (x, 1), f (1, y), f (x + h, y), f (x, y + k) for f (x, y) =
x2 − 2xy − 3y.

∂f ∂f
Exercise 17. Find from definition ∂x
and ∂y
where f (x, y) = x3 − 3xy 2 + 5y.
14 Differential and Integral Calculus

∂ 2f
 
∂ ∂f
fxx = =
∂x2 ∂x ∂x
∂ 2f
 
∂ ∂f
fxy = =
∂x∂y ∂x ∂y
2
 
∂ f ∂ ∂f
fyx = =
∂y∂x ∂y ∂x
2
 
∂ f ∂ ∂f
fyy = = .
∂y 2 ∂y ∂y
Exercise 18. Find fxy (0, 0) and fyx (0, 0), where

 xy(x2 2 −y2 2 ) , (x, y) ̸= (0, 0)

x +y
f (x, y) =
0

(x, y) = (0, 0).

Exercise 19. Find fxy (1, 2) and fyx (1, 2), where f (x, y) = x2 − 2xy − 3y.

Theorem 1.0.1 (Youngs theorem/Clairaut’s theorem). If f : R2 → R is twice

continuously differentiable, i.e., f ∈ C 2 then fxy = fyx .

Differentiability: When f : R → R, x ∈ R we define

df f (x + h) − f (x)
= lim (1)
dx h→0 h
provided the limit exists. In case f : R3 → R and X = (x1 , x2 , x3 ) ∈ R3 the
above definition of the differentiability of functions of one variable (1) cannot
be generalized as we cannot divide by an element of R3 . So, in order to define
the concept of differentiability, what we do is that we rearrange the above
definition (1) to a form which can be generalized.
Let f : R → R. Then f is differentiable at x if and only if there exists
α ∈ R such that
|f (x + h) − f (x) − α · h|
→ 0 ash → 0.
|h|
df
When f is differentiable at x, α has to be dx
. We generalize this definition to
the functions of several variables.
15 Differential and Integral Calculus

Definition 1.0.26. Let f : R3 → R and X = (x1 , x2 , x3 ). We say that f is

differentiable at X if there exists α = (α1 , α2 , α3 ) ∈ R3 such that the error
function
f (X + H) − f (X) − α · H
ϵ(H) =
∥H∥
tends to 0 as H → 0.

In the above definition α · H is the scalar product. Note that the derivative
df
| =
dx X
(α1 , α2 , α3 ).
Homogeneous function:

Definition 1.0.27. A function f : R2 → R is said to be homogeneous of degree

n if it can be expressed in one of the following equivalent forms:
y
f (x, y) = xn ϕ
x
 
n x
or f (x, y) = y ψ
y
or f (tx, ty) = tn f (x, y), where t is any number independent of x, y.

Similarly we can extend the definition for R3 , Rn .

Exercise 20. Show that f (x, y) = ax2 +2hxy +by 2 is a homogeneous function.

2 +y 2 +z 2
x√
Exercise 21. Check whether f (x, y, z) = x+y+z
is a homogeneous function.

Theorem 1.0.2 (Euler’s Theorem). If u = f (x, y) is a homogeneous function

in x and y of degree n having partial derivatives with respect to x and y then

∂u ∂u
+y x = nu.
∂x ∂y

Proof. We have u = f (x, y) = xn ϕ xy . Therefore,

∂u y  y  y
n−1
= nx ϕ + x · − 2 ϕ′
n
∂x x x x
16 Differential and Integral Calculus

   
∂u 1 y
n
=x · ϕ′
∂y x x
∂u ∂u y y y
x +y = nxn ϕ − yxn−1 ϕ′ + yxn−1 ϕ′ = nu.
∂x ∂y x x x

Exercise 22. Verify Euler’s theorem for the following functions:

1. f (x, y) = x4 + x2 y 2 − 2y 4

2. u = x5 + y 5 + 3x2 y 3
5 5
3. v = ln xx3 +y
−y 3
.

Theorem 1.0.3 (Mean Value Theorem). Let f : [a, b] → R such that

(i) f is continuous on [a, b]

(ii) f is differentiable at every point of (a, b)

then there exist at least a point ξ in (a, b) such that

f (b) − f (a)
= f ′ (ξ).
b−a
Theorem 1.0.4 (Taylor’s Theorem). Let f : [a, a + h] → R such that

(i) f is continuous on [a, b] and

(ii) f is differentiable in (a, a + h)

then there exist a real number θ in (0, 1) such that

h2 ′′ ′ hn−1 hn (1 − θ)n−p n
f (a + h) = f (a) + hf (a) + f (a) + · · · + + f (a + θh),
2! (n − 1)! p(n − 1)!
where p is positive integer ≤ n.

hn (1−θ)n−p n
Note that Rn = p(n−1)!
f (a + θh) is known as the remainder term. If
hn
p = n then Rn = n!
f n (a + θh) and it is know as Lagranges form.
17 Differential and Integral Calculus

Exercise 23. Expand f (x) = sinx using Taylor’s theorem.

Proof. For n ∈ N, f n (x) = sin( nπ

2
+ x). By Taylor’s theorem we have,

′x2 ′′ xn−1 n−1 xn n

f (0+x) = f (0)+xf (0)+ f (0)+· · ·+ f (0)+ f (θx), θ ∈ (0, 1).
2! (n − 1)! n!




 0 if n even


We have f (0) = 0 and f n (0) = 1 if n = 4k + 1




−1 if n = 4k + 3.

3 5 n
Hence f (x) = x − x3! + x5! − · · · + (−1)n+1 xn! sin( nπ
2
+ θx). It is to be noted
that f n (x) exists for all real x and right han side of the above equation takes
the form of an infinite series as n → ∞. Moreover it converges to f (x) for
those real x where
xn nπ
lim sin( + θx) = 0.
n→∞ n! 2
x3 x5
Therefore sinx = x − 3!
+ 5!
− ···.

Exercise 24. Expand f (x) = cosx using Taylor’s theorem.

Exercise 25. Expand f (x) = ex using Taylor’s theorem.

Convex and Concave Function: First we will talk about convex set
and then we will define the notions of convex and concave function. Here we
will define those notions for R and R2 but the higher dimensional cases can be
denied likewise.

Definition 1.0.28 (Convex set). A set X ⊂ R2 is convex if for any pair of

points (x1 , x2 ), (y1 , y2 ) ∈ X,

λ · (x1 , x2 ) + (1 − λ) · (y1 , y2 ) ∈ X

for all 0 ≤ λ ≤ 1.
18 Differential and Integral Calculus

Definition 1.0.29 (Concave function). Let X ⊆ R/R2 be a convex set and

Y ⊆ R. Then f : A → Y is said to be concave if for any x1 , x2 ∈ X and
λ ∈ [0, 1]
f (λx1 + (1 − λ)x2 ) ≥ λf (x1 ) + (1 − λ)f (x2 ).

Definition 1.0.30 (Strictly concave function). Let X ⊆ R/R2 be a convex set

and Y ⊆ R. Then f : A → Y is said to be strictly concave if for any x1 , x2 ∈ X
and λ ∈ [0, 1]

f (λx1 + (1 − λ)x2 ) > λf (x1 ) + (1 − λ)f (x2 ).

Definition 1.0.31 (Convex function). Let X ⊆ R/R2 be a convex set and

Y ⊆ R. Then f : A → Y is said to be convex if for any x1 , x2 ∈ X and
λ ∈ [0, 1]
f (λx1 + (1 − λ)x2 ) ≤ λf (x1 ) + (1 − λ)f (x2 ).

Definition 1.0.32 (Strictly convex function). Let X ⊆ R/R2 be a convex set

and Y ⊆ R. Then f : A → Y is said to be strictly convex if for any x1 , x2 ∈ X
and λ ∈ [0, 1]

f (λx1 + (1 − λ)x2 ) < λf (x1 ) + (1 − λ)f (x2 ).

Exercise 26. Suppose quantity demanded q as a function of price p is given

by q = 8 − 2p. Is total revenue as a as a function of price concave of convex?

Exercise 27. Check whether the functions listed earlier are convex or concave.

Another Mathod to check: A twice differentiable function is convex if and

only if at all points on its domain f ′′ (x) ≤ 0.
A twice differentiable function is strictly convex if and only if at all points
on its domain f ′′ (x) < 0.
19 Differential and Integral Calculus

A twice differentiable function is concave if and only if at all points on its

domain f ′′ (x) ≥ 0.
A twice differentiable function is strictly concave if and only if at all points
on its domain f ′′ (x) > 0.

Integral Calculus
Indefinite Integral: A function F (x) is an indefinite integral (or antideriva-
tive) of the function f (x) if F ′ (x) = f (x) for all x in the domain of the function.
´
We usually write F (x) = f (x)dx and f (x) is known as the integrand.
Some rules:
´ xn+1
1. xn dx = n+1
+ c, n ̸= 1.
´ amx
2. amx dx = mloge a
+ c.
´ emx
3. emx dx = m
+ c.
´ 1
4. ax+b
dx = a1 loge | ax + b | +c.
´ ´
5. c · f (x)dx = c f (x)dx.
´ ´ ´
6. (α · f (x) ± β · g(x) ± · · · )dx = α f (x)dx ± β g(x)dx ± · · · .

Exercise 28. If f ′ (x) = 3x2 + 2 and f (0) = 0 find f (2).

Exercise 29. Calculate the following:

´ x
1. 1+x
dx
´ x2 +1
2. 1+x
dx
´ x2 +5x+2
3. 2+x
dx
20 Differential and Integral Calculus

´ (x−1)(x−5)
4. (x−2)(x−4)
dx
´
5. 23x dx
´
6. e5x dx.

By substitution Here we will list down some of the special form and indicate
what to substitute to calculate.
´
Rule I: If it is of the form {f (x)}n f ′ (x)dx then one need to put f (x) = y
or some integral power of y.
´ x4
Exercise 30. Calculate √
3
2x5 +3
dx.
´
Rule II: If it is of the form (ax + b)n dx then one need to put ax + b = y
or some suitable power of y.
´√
3
Exercise 31. Calculate 3 − 2xdx.
´ ax+b
Rule III: If it is of the form px+q
dx then one need to put px + q = y.
´ 2x+3
Exercise 32. Calculate 3x+2
dx.
´ ´ √
Rule IV: If it is of the form √ax+b dx and (ax + b) px + qdx then one
px+q

need to put px + q = y 2 .
´
Exercise 33. Calculate √2x−3 dx.
4x−1

´ dx
Rule V: If it is of the form xm (ax+bn )
then one need to put ax + b = xz.
´ dx
Exercise 34. Calculate x2 (x+2)3
.
´ dx√
Rule VI: If it is of the form √
ax+b± ax+c
then rationalize the denominator.
´ dx√
Exercise 35. Calculate √
x+1+ x+2
dx.
21 Differential and Integral Calculus

Integration by parts: To select first function and the second function

from the product of two functions to integrate (by parts) we follow ILATE
or LIATE rule where I stands for inverse triginometric function (such as
sin−1 (x), cos−1 (x) etc.), L stands for logarithmic function, A stands for alge-
√
braic function (for example ax+b, x etc.), T stands for trigonometric function
(for example sinx, cosx etc.) and E stands for exponential function. Let f (x)
be the first function and g(x) be the second function. Then integration by
parts says that
ˆ ˆ ˆ ˆ
′
f (x) · g(x)dx = f (x) g(x)dx − {f (x) · g(x)dx}dx.
´ ´
Exercise 36. Calculate loge xdx and x2 e−3x dx.

Theorem 1.0.5 (Fundamental Theorem of Integral Calculus). If f : [a, b] → R

is integrable on [a, b] and f posseses an antiderivative ϕ on [a, b] then
ˆ b
f (x)dx = ϕ(b) − ϕ(a).
a

Exercise 37. Calculate the following:

´1 x
1. 0 1+x
dx
´2 x2 +1
2. 1 1+x
dx
´2
3. 1
loge xdx
´1
4. 0
23x dx
´ 10
5. 2
e5x dx.

Consumer and product surplus Let p = d(q) be the demand function

and p = s(q) be the supply function. Further let (p∗ , q ∗ ) be the equilibrium point
then consumer surplus is given by
ˆ q∗
d(q)dq − p∗ q ∗
0
22 Differential and Integral Calculus

whereas the product surplus is given by

ˆ q∗
∗ ∗
pq − s(q)dq.
0

Exercise 38. Suppose a firm begins at time t = 0 with a capital stock K(0) =
5, 00, 000 and in addition to replace any depreciated capital, is planning to
invest in new capital at the rate I(t) = 600t2 over the next 10 years. What
would be the capital stock at the end of the ten years if the plan is carried out?

1
Exercise 39. The demand function for a product is q = 15 − 3p 2 . Compute
the consumer surplus at prices p = 4 and p = 1.