Documente Academic
Documente Profesional
Documente Cultură
METHOD
EDITED BY
A. L.
No.
3.
BOWLEY
AND A.
WOLF
MATHEMATICAL ANALYSIS
FOR ECONOMISTS
BY
R. G. D.
ALLEN
To
or mathematical pattern
MAQMILLAN AND
ST.
CO.,
LIMITED
FOREWORD
TEUS book, which is based on a series of lectures given at the London
School of Economics annually since 1931, aims at providing a course
of pure mathematics developed in the directions most useful to
students of economics. At each stage the mathematical methods
described are used in the elucidation of problems of economic theory.
Illustrative examples are added to all chapters and it is hoped that the
reader, in solving them, will become familiar with the mathematical
tools and with their applications to concrete economic problems.
The method of treatment rules out any attempt at a systematic
development of mathematical economic theory but the essentials of
such a theory are to be found either in the text or in the examples.
I hope that the book will be useful to readers of different types.
The earlier chapters are intended primarily for the student with no
mathematical equipment other than that obtained, possibly many
years ago, from a matriculation course. Such a student may need to
accustom himself to the application of the elementary methods
of the chapters.
I have received helpful advice and criticism from many mathematicians and economists. I am particularly indebted to Professor
A. L. Bowley and to Dr. J. Marschak and the book includes numerous
made
modifications
my
of the examples.
R. G. D.
ALLEN
CONTENTS
CHAP.
FOREWORD
SHORT BIBLIOGRAPHY
THE
I.
---------.....
......
--------------------------
GREEK
USE OF
ANALYSIS
LETTERS
IN
1.2
1.3
1.4
...
.....
1.7
Derived quantities
JpOJ ACTIONS
2.2
2.3
13
14
III.
28
32
3(5
38
41
45
48
50
54
.........
.........
.....
3.2
3.3
28
Function types
2.6 The symbolic representation of functions of any form
2.7 The diagrammatic method
2.8 The solution of equations in one variable
2.9 Simultaneous equations in two variables
II
1G
graphical
2.5
tions
20
---------23
EXAMPLES
2.1 Definition
xvi
1.8
methods
v
xiv
MATHEMATICAL
1.1
PAGE
57
61
61
03
66
CONTENTS
viii
CHAP.
3.4
3.5
3.6
The parabola
The rectangular hyperbola
The circle
09
-
72
...
75
76
.
Curve classes and curve systems
economic problem in analytical geometry
EXAMPLES III-- The straight line curves and curve systems
3.7
3.8
An
80
82
IV. LIMITS
4.1
4.2
85
----------
85
91
4.7
4.8
M u ti- valued
4.6
EXAMPLES IV
V. FUNCTIONS
continuity of functions
Introduction
5.2
Demand
and curves
functions and curves
Total re vemie functions and curves Cost functions and curves
demand
Other functions
100
103
107
-107
112
116
-117
108
arid curves in
VI. DERIVATIVES
6.1
Introduction
6.2
The
121
124
127
129
134
134
definition of a derivative
137
140
6.3
VII.
102
EXAMPLES
97
98
economic theory
goods
5.8 Indifference curves for the flow of income over time
5.6
95
functions
5.3 Particular
5.5
..----.
Limits of functions
5.1
5.4
functions
88
142
-
143
148
149
152
57
160
160
7.1 Introduction
7.2
7.3
its
derivative
161
163
CONTENTS
ir
PAGE
CHAP.
7.4
7.5
7.6
7.7
EXAMPLES VII
Practical derivation
8.2
values
8.5
A general
problem of average
16S
171
-
179
Monopoly problems
181
184
and minimum
-
-J8G
190
196
eco-
191
in
8.8
Problems of duopoly
8.9
A note
oil
economic theory
EXAMPLES VIII
9.1
Exponential functions
9.2
9.4
9.5
9.6
Compound
211
----------------...
-
*9.7
9.8
interest
functions
----------
217
219
223
228
232
234
242
211
213
238
X. LOGARITHMIC DERIVATION
10.3
200
204
205
9.3
179
172
175
166
242
246
248
251
252
254
257
derivatives
-
260
264
CONTENTS
PAGE
CHAP.
XI. FUNCTIONS OP
11.1 Functions of
11.2
------
of
representation
functions
11.5
---------
Diagrammatic
variables
Non -measurable
variables
of
utility function
and
-276
indifference curves
EXAMPLES
270
272
275
Systems of equations
11.7 Functions of several variables in economic theory
11.8 The production function and constant product curves
The
268
two
278
11.6
11.9
268
281
284
289
eco-
292
296
296
300
303
305
12.3
12.4
two variables
and higher orders
-----
variables
12.8
12.9
The
12.6
12.7
-315
317
functions
linear
EXAMPLES XII
tions
tives
Partial derivatives
13.2
13.3
320
322
326
328
330
332
334
homogeneous func-
XIII. DIFFERENTIALS
13.1
309
310
AND DIFFERENTIATION
326
339
340
344
345
variables
13.7
The
EXAMPLES XIII
Differentiation
of differentials
...
economic applications
347
CONTENTS
xi
CHAP.
PAGE
14.3
J4.4
14.5
351
a function of two
or more variables
Examples of maximum and minimum values
Monopoly and joint production
Production, capital and interest
-----
14.0 Relative
maximum
arid
minimum
values
lems
economic
The
definition of
definite integral
-----
15.8
15.9
EXAMPLES
XV
Integration
goods
integrals in
distribution
390
393
396
400
401
404
406
412
412
417
422
425
439
430
434
438
Other
384
408
16.6
384
economic prob-
lems
16.1
367
309
374
387
352
356
359
362
364
378
...
15.2 Definite integrals as areas 15.3 Indefinite integrals and inverse differentiation
15.4
problems
351
...
-
differential equations
16.8
442
17.2
and
infinite series
.....
.---.----
446
446
variable (Taylor's
449
CONTENTS
xii
PAGE
CHAP.
17.3
17.4
17.5
Examples of the expansion of functions The expansion of a function of two or more? variables
A complete criterion for maximum and minimum
values
--------........
461
4(55
454
456
independent
variables
EXAMPLES XVII
Infinite series
order differentials
expansions
459
463
higher
-
-469
FORMS
18.1
18.2
472
472
473
477
478
orders
ables
The
8.6
18.8
18.9
Two
-----
EXAMPLES XVIII
Determinants
quadratic forms
linear
equations
-
-492
-------
19.3
19.4
The
demand
19.6 Variation of
19.7
Demands
EXAMPLES
XIX
lems
495
498
500
502
503
505
509
ease)
19.8
495
values of a function of
19.2 Relative
stability of
481
482
485
489
491
513
General
517
CONTENTS
xiii
PAGE
CHAP.
20.2
20.3
20.7
-521
,523
.EXAMPLES
:
XX
524
52(>
INDEX
521
......
---------------
529
530
533
536
540
MATHEMATICAL, METHODS
543
ECONOMIC APPLICATIONS
AUTHORS
540
548
A SHORT BIBLIOGRAPHY
is essential to keep in mind, at all times, what mathematical analysis
about and the way in which it has developed over the centuries. Not
only beginners, but also accomplished mathematicians, can profit by
reading such short introductions as
IT
is
Whitehead
An
Introduction to
Mathematics (Homo
University
Library, 1911).
Brodetsky
1929).
Rice
ledge, 1931)
Number
(1930).
Hogben
The history of mathematics has been
:
the subject of
many
books
1915).
Sullivan
(1925).
can consult
Durell
Durell,
an introduction to the
Thompson
Calculus
Irving Fisher
calculus).
1919).
Brief Introduction to the Infinitesimal Calculus
BIBLIOGRAPHY
xv
Hardy
Griffin
Osgood
(1925).
de
la
Vallee Poussin
Conrant
1932).
In trigonometry,
angles.
a,
j8,
0,
<f),
varia
CHAPTER
IT
is
geometry and
we
find
between geometrical and analytical symbolism is more or less arbiFurther, we shall see that it is a simple matter to devise a
trary.
Elementary
is
abstract
its applications.
It
is
M.A.
logic,
"
can be
and the
in-
said,
The popular
in
Some problems
logic,
with
its
limited range,
is
of
At most
and
field
of
The
more
shaky does the whole familiar structure appear. This need not
worry us unduly the crazy system works as no other system can.
;
1.2
Numbers of various
types.
Numbers
the number system is far from simple and that numbers of very
different kinds are freely used in arithmetic and algebra. It is convenient, therefore, to spend a little time sorting out the various types
of numbers and showing how they have developed side by side with,
and by reason
is
down
in
1,
2,
3,
4,
5,
...
The
this is
We
of two or more
we
We
and
fractions, is
it is
6,
rational numbers.
*
certain amount of duplication must bo eliminated
for example, in the simplest equivalent form J.
by writing },},$,
...
"
"
numbers.
The next extension of the number system is useful in arithmetic
but only becomes vital when algebra is developed. We have not yet
referred to subtraction, the process converse to addition. When a
smaller (rational or irrational) number is taken from a larger one,
the result is an ordinary number of the same kind. This is not true
and
between any two numbers
In arithmetic
are reversed.
it is
desirable,
is
a uniform process.
By
number
zero.
An
In algebra
We
"
"
form
of equation
recognise these as examples of the same
we
can
the
aid
zero
and
include all
of
(with
negative numbers)
and
them
of
in one
uniform expression.
We write the
(-3)=Q;
+(-5)=0.
2x*
* See 4.1
(footnote) below.
equations
+ -3)x +1=0
(
where
a, b
or zero).
stage.
irrational.
"
"
There are
(2)
is
i.e.
",
The development of the real number system from the basic idea
of a sequence of integers marks the end of a certain line of evolution
and provides a convenient stopping place. One guiding principle
stands out in what we have said. The introduction of each new
number type was designed to impose uniformity where uniformity
* This is
was previously lacking and, at the same time, to preserve all the
essential rules of arithmetic and algebra. This is a most important
principle which will be found at work throughout the development
of mathematical analysis, the constant striving after generality,
uniformity and simplicity. Herein lies much of the fascination of
where new extensions of the number system are required. The process of division, for example, still fails in one case since a real number
divided by zero does not give a real number. We must turn a more
or less blind eye to this deficiency though it will be partly side"
"
more
tracked later when the idea of a
limit
is introduced.
uniformity
"
"
is,
in fact, achieved
"
"
by introducing what
are termed
complex
or
Right at the beginning of our development, therefore, we find ourselves approaching the difficult country of the
infinitely large
and the
"
infinite ", of
the
more
until a
and discontinuous
variables.
modern
is
uses are
made more
obvious distinction
lies in
the use of
"
variable
"
numbers,
Many
For example,
0<x<l
or
0<#<1
The notion of an
the value a as
total
"
"
length
positive
small,
An
of the interval
number we
i.e.
is
is,
in general,
any
fix, it is
tinuous
Though k
2k.
if its
range
is
either the
now
be made.
whole
set of real
variable
is
con-
numbers or any
"
The
"
here is of exactly
continuous
adjective
the same connotation as the same adjective applied to the number
system itself the values of a continuous variable can be ordered so
;
that they are indefinitely dense and without gaps. It is often convenient, for example, to think of a continuous variable as taking
values successively in increasing order of magnitude and we describe
"
by saying that the variable increases continuously in value
this
A discontinuous
variable,
variable cannot be arranged in order of magniAny set of numbers of a particular type, e.g. the
set of integers or of multiples of -|, provides a range of variation
which is discontinuous. For example, if the price of a commodity
is
1.5 Quantities
and
their
measurement.
is
here the
10
abstracted properties
shapes,
"
colours,
temperatures,
pitches
of
Some
of the properties abstracted from scientific phenoand lengths) can be presented in order
temperatures
(e.g.
a
to
of
criterion
according
greater or less, higher or lower or whatever it may be other properties (e.g. shapes and colours) cannot be
property.
mena
ordered in this way.* Hence we arrive at our first distinction. Properties not capable of arrangement in order can be termed qualities
The
association
scientific field,
on.
A second distinction
that any two of its values can be taken and added together to give
a third value of the same magnitude, then numbers can be used in
and the processes of arithmetic apply. Magnitudes with the additive property can be called directly measurable
quantities and we shall show how numbers can measure, and not only
* It
may be possible, in the construction of physical theories, to analyse a
quality such as colour and to connect it indirectly with numbers (e.g. by
means of "wave lengths"). This merely indicates that our distinctions are
not hard and fast as, of course, they cannot be.
11
quantities.
Lengths, masses, time-intervals and electric
charges are examples of quantities
temperatures and pitches of
notes are instances of magnitudes which are not quantities.
order,
In order to
definite length
possible to construct a scale for measuring length.
is chosen as standard and a number of such lengths are placed end
defined as covering so
All that
is
is
is
specified or
2,
10 or 143,
all cases,
when
the scale
direct comparison
properties.
The
first
step
is
numbers
in
is
such that
it
that a hundred such lengths together cover 275 of the inch units.
In practice, this process will suffice since there must be some
physical limit to the comparisons that can be
made between a
12
given length and any actual inch scale. But the measurement of
lengths by means of rational numbers fails in our theoretical require-
ments of length.
is
that
we have grown
we can
is
13
and
measurement.
is
given.
as defined above,
The
is
only unique
is
and rods or
It will be
distinction
is
measurable magnitudes.
There exists a very simple rule connecting the measures of a given
quantity on two different scales. Let the second scale unit be
14
length
we happen
to take.
units
may
can be measured by
6,
12,
18,
24,
30,
...
inches
1,
f,
2,
f,
...
feet;
f,
...
yards.
or
The
set of lengths
f,
by saying
that the ratio of the measures of two quantities of the same kind is
independent of the units chosen. The ratio of the measures of the
first two lengths instanced above is always |
the first length is half
the second, a statement independent of scales.
The arbitrary element in the indication of a magnitude which is
;
whatever
1,
There
not
3,
4,
5,
...
1,
3,
5,
7,
9,
...
1,
4,
9,
16,
25,
...
and
so on.
is
indicate
2,
arise.
From
the limited
number of fundamental
quantities necessary
It
length measures.
15
frequent, are the derived quantities obtained by dividing one fundamental quantity by another. The quotient of distance travelled by
known
divided by the
number of
price of the
units of a
commodity.
pounds per cubic inch and prices by so many pence per pound. The
measures of derived quantities, like those of the fundamental quantities, are numbers which are taken as continuously variable.
It will
"
"
"
average
type and the
marginal
type. Average
the
first
illustrates
type if a train travels 45 miles in an hour
speed
and a half, then we say that its speed, on the average, is .30 miles per
types, the
hour.
is
illustrated
by velocity or instantaneous
if
from the given moment, divided by the time-interval, is approximately equivalent to 30 miles in an hour. The price of a commodity,
as usually defined, is an average price. The corresponding marginal
"
concept can be defined, however, and given the name
marginal
revenue ", a concept of considerable importance in economic theory.
Both corresponding types of derived quantities are measured in the
same way and in terms of the same pair of scale units.
The various scales necessary for the measure of a derived quantity
are at choice and, if any one unit is changed, then the numerical
measure of the derived quantity is changed. But the change is
governed by a rule of proportions similar to that already described.
16
of
B equals A
&
is measured by x on the
Then we have
quantity
scales.
scale
For example, the average speed of a train is 30 miles per hour. Now,
30 miles in an hour implies 30 x 5280 feet in an hour, and so
feet in a second.
Again,
j/d.
per pound
if
a constant multiple of an
the
units of measurement.
by changing
When the derived quantity is the quotient of two quantities, as
often happens, the multiple is simply the ratio of the scale multiples
So, one measure of a derived quantity
is
1.8
and
tell
us that
we can assume
17
is
The geometrical considerations given here can, therefore, be illusby drawing actual diagrams in the plane of the paper (two
dimensions) or by sketching plane representations of spatial models
It is possible, by giving up visual representations,
(three dimensions)
to extend our geometry to spaces of more than three dimensions
with the same properties as those given above. But this would
trated
to undertake here.
"
"
hypersurfaces
planes and
surfaces.
the space.
Space of one dimension consists of a continuous and indefinitely
extended straight line which we can denote by L. A practical
method of
We
e.g.
one unit
| inch,
"
is
taken.
Taking
for convenience of
wording
the line
as
line
L is located without
inches) of the
ambiguity by a number, the number of units (e.g.
distance of the point from 0. The number can be positive (if the
point is to the right of 0) or negative (if the point is to the left of 0).
So, the point located
B
by the number
-f
is
18
ence,
still
unique within
itself, is
set up.
to locate points in
is
two dimensions,
i.e.
in a
PM
OM
is
L2
the distance of
;
if this
P is to the left of L
parallel to
from
number is
L2
number
i.e.
parallel to
l9
i.e.
2 and if negative,
The second number is the distance of P from
the height of
P is
above
Ll
if
the
is
quadrant the first number is negative and the second positive, in the
S.W. quadrant both numbers are negative, and in the S.E. quadrant
the first number is positive and the second negative. The order of
an interchange of the numbers
writing the numbers is important
;
19
From
Scale:
One
The
unit
FIG.
result is a graph,
showing a
= % inch
1.
more or
less arbitrary
and each
Examples
scale
I provide
all distances,
A rectangular
OM
with
set of three
and
their co-ordinates.
A variable point in space is a point which can take any position from
As a point varies in position, so
the numbers which serve to locate the point vary in value. From
this simple fact, we can construct
a given range of possible positions.
geometry.
We can start with the twodimensional case and, since
are
>-
we
any
and
2.
the lines
reference.
Ox and Oy
Any point P is
OM
ON
y units of
where the
21
horizontal axis (Ox here) is called the abscissa and the co-ordinate
along the vertical axis is called the ordinate of P.
scale of
base
From another
line.
(x, y) is
reached
distance
The
origin
The
co-ordinates of particular points should be noticed.
is itself a point in the plane and its co-ordinates arc seen to
(0, 0).
Any
point on
appears as
the
?/-axis.
have
shown
(called
22
"
"
OM
OM
Then the
z)
is
so far in
we
23
We
EXAMPLES
The measurement
of quantities
1. Explain how a scale of measurement for mass, considered as a fundamental quantity, can be constructed. How is a given mass compared with
the scale? Must continuity be imposed upon the moasuro of mass? Consider
the other fundamental quantity, time -interval, on the same lines.
An
isosceles triangle
of variable size.
3.
circle,
Show how
to four right angles can now be measured. How can this be extended to angles
of any size? What is the relation of this longth measure to the familiar
measure in degrees?
5. Given the connection between a foot and a centimetre, find an approximate measure of a centimetre in inches. Express 5 inches in centimetres,
3 1 yards In metres and 1 mile in kilometres.
6. From the measure of a pound in grammes, find the approximate
measure of a gramme in ounces. Express 2 ounces in grammes and 12 pounds
in kilogrammes.
7.
Express 5072 square inches in square yards and 0-038 cubic feet in
One acre is 4840 square yards how many acres are there in a
cubic inches.
square mile?
8. Express a speed of 20 feet per second in miles per hour. What is the
measure of a speed of 60 miles per hour in. feet per second and in metres per
second ?
9. A uniform body weighs 6 cwts. and has a volume of 5 cubic feet.
the density in pounds per cubic foot and in ounces per cubic inch.
Find
10. A cube of uniform substance has a side of 2 inches and weighs 3 pounds.
Find the density in pounds per cubic inch and in grammes per cubic centi-
metre.
*
grammes.
and
pound
453 -6
24
11.
For a
particle of
mass
Momentum
and
How
A body of mass
and
= \m
v2
12.
second.
and
Kinetic Energy
Find
its
pounds
is
momentum and
13. Illustrate the fact that the derivation of secondary quantities can be
carried beyond the first stage by expressing acceleration (the change of velocity
over time) in distance and time units. The acceleration due to gravity is
approximately 32 in feet-second units ; what is its measure in centimetres
and seconds?
14.
bag wholesale.
retail price
halfpenny) ?
wheat obtained
From
lind the average product per acre and the average cost per bushel of
can these derived figures bo used to compare
in each case.
production in the different regions named?
How
wheat
wheat
17. Assuming that a bushel of British wheat, produced under the conditions of tho previous example, is sufficient for 60 pounds of bread, calculate
the cost of production of the wheat content of a two pound loaf. The wheat
and the loaf sells at 4d. ; what proportion of
producer makes a profit of 7
the selling price goes in baking and distribution ?
J%
pence.
19. Show that the rate of simple interest is a number expressed only in
time units, varying inversely with time. How is the rate of interest per year
reduced to a rate of interest per week? What is the amount of 100 at
r% simple interest per year at the end of n years?
20.
A man
pawns
his
watch
for 18s.
and
is
way
25
of interest. Calculate tho rate of (simple) interest per week that is implied by
this charge. If 12% per year is taken as a standard rate of interest for this
type of loan, is the pawnbroker extortionate in this case ?
Graphical methods
21. Selecting suitable rectangular axes in a plane, plot the points with co-
ordinates
(4,
1)
-|, 3)
(2, \)
(2-3,
1-7)
and
2-8, 0).
22. Show that the three points whose co-ordinates referred to rectangular
~ 2, - 4) form an isosceles
axes in a plane are
(9, 3) and O (
(5, 7),
triangle
ABC. Which are the equal sides? By direct measurement, determine
whether the other side is longer or shorter.
23.
plotting a graph,
By
( -3, 5)
(5, -1)
-3)
centre and measure the radius of the
(6, 2)
(1,
all lie
on a certain
circle.
- 3, (
1)
Loco to tho
;
circle.
24.
in
in a point
points
respectively.
A
L
Draw
27. Choosing convenient scales, plot a graph of the pairs of values of the
variables x and y given below :
Draw a
26
The
28.
Plot the corresponding points on graph paper, draw a smooth curve through
the points and find the values of y when is - 6 and 5. What can bo deduced
about the variation of y when x varies ?
it*
(Such a graph
is
called a
scatter
show the
diagram
".)
and q.
any evidence that a
vertical lines at O.
27
(3,
60)
300)
(1,
(f,
0)
Illustrate
und
and. tho
"K.
CHAPTER
II
notion,
we can
quantities of the
Any observed or
phenomena
has fallen
(in feet or
some other
unit) depends
on the time-interval
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
way with
29
"
of price.
modity, i.e. demand is a function
In each of these examples, there are two variable quantities represented, in specific units, by variable numbers. The quantities, and
involves the concepts of a relation between the values of two variables and the dependence of one variable on the other.
Formal
definitions of
It
is
is
There
no discrimination
between the variables except for convenience, and one variable does
even from
is
30
quantities of actual
relation
is inter-
preted
is
inverse.
The concept of a function is an extremely wide one. The following examples serve to show this and will, also, help us to classify
functions in a convenient
Ex.
1.
The
is
variables x
way
double that of
In symbols
x.
2x-y = Q
is the expression of this
implicit function.
functions are
The two
y = 2x and x \y.
The range of variation of x and y consists of all
real
explicit
and
inverse
numbers.
Ex. 2. The variable y depends on the variable x, which can take any
numerical value whatever, according to the algebraic processes indicated
expressible
is
more
difficult to derive,
but
it is
Ex.
3.
The
variables
is
3,3
explicit
y=-*
and
#=-.
y
all real
numbers.
is 3.
In
FUNCTIONS
EX.
The
4.
DIAGRAMMATIC REPRESENTATION
variable
is
31
y -100 (I -05)*
where the range of values of x is taken as consisting of positive integers
only. The inverse function can be expressed only in terms of logarithms
(see 10.2). This is an example of a function of a discontinuous variable
and it can be noticed that it expresses the amount y that results when
100 is left for x years at 5% interest compounded yearly.
Ex.
The
5.
variables x
y.
and
The
x-=
The range of values of x for a real value of y consists of all numbers not
numerically greater than 4, and similarly for the range of y. Except
when x or y is 4, there are two values of y corresponding to each given
value of
Ex.
x,
6.
and conversely.
An
x3
The two
-ft/
and y
is
defined
by
3^-0.
The
Ex.
7.
2/^9
2/^10
2/-12
Here, y is a function ofx and the range of x consists of all positive numbers
not greater than 15. On the other hand, when x is considered as a function
of y, the range of the latter is discontinuous and consists only of the
This function expresses the inland
positive integers between 6 and 12.
postage, y pence, as dependent on the weight of a parcel, x pounds (see
Ex.
8.
The
A function
variable y
is
of this nature
is
defined as the
official
32
marks obtained by at
least
one candidate.
tinuous ranges.
graphing of functions. The practical process is described in textbooks on algebra and we need give here only a general account and
a few examples of the process.
From the definition of a given function, a table of corresponding
values of the two variables x and y can be constructed and made as
we
wish.
It is usually
Ox and Oy
Co-ordinate axes
Ox
horizontal
Ex.1.
2/=
The following
of the function
table of values of x
and y
is
it is
be drawn through them (Fig. 4). Between the points where x equals -2
and -1, more detail is required than elsewhere and one intermediate
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
33
point has been plotted. It is found that the lowest point of the curve is
at or very near to the point ( - 1^, -4J). The graph represents a curve
known as the parabola (sec 3.4 below).
Ex.2. xy=3.
The graph of the function can be plotted from the
table
small.
When
is
curve
known
Ex.3.
*2 +*/2 = 16.
The following
table
is
the values of y being taken to one decimal place. Outside the range
shown, there exist no values of y at all. At x = 4 there is a single value
c
M.A.
34
Ex.4.
The
x*+y*-3xy=Q.
now appears
and
y,
O
are
correct
to
4 Jf
method described
and two
tails ".
of Descartes, of a
by a smooth curve
(Fig. 7) consisting of
"
"
loop
previous examples.
5.
graph
is
8).
This
is
a function which
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
35
properties of particular functions it provides, at least, a visual representation of the related variation of the two variables. For example,
:
the varying height of the curve shown 011 the graph (above or below
the horizontal axis Ox) indicates the way in which y varies as x is
changed in a definite way. The graph can also be used to replace
is done, corresponding
values of the variables at inter-
shown.
8.
36
may
descriptive.
On
graphical
"
diagram
evident.
cluster
and
It
may
definite relation
errors
its
is then represented by a
"
of points. Such a graph is called a
scatter
uses, at least for purposes of illustration, are
be suspected, for instance, that there exists a
set of observations
"
between
p and
q,
a relation which
is
if
disturbed by
The
a relation
correctis
found
and curves.
is
no
limit to the
number of entries
related in an ordered
The function
way by
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
37
variables x
and
y,
common
is
a collection of
Fixing co-ordinate
axes and attaching co-ordinates to each point of the plane, the
property defining the curve can be translated into an analytical
points in a plane with
characteristic.
of the curve.
a
circle
of a plane,
centre at a fixed point
i.e. the curve consisting of all points
Fix codistant 4 units from 0.
PM
(Fig. 9).
since
all
is
PN
Fm.
0.
positions of
on the
units.
circle.
by
all
Hence,
points
(cf. 2.2,
But
Ex.
(x, y)
3,
on the given
circle, i.e.
the
above).
when
now
clear that a
38
the function.
variables x
The function
and y
the curve
is
is
is
representation.
Finally, notice that
"smooth"
in
We
other,
operations indicated.
functions
the other
;
is
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
39
function of
example y
in the
of y
x,
is
valued function
is
clear
from
is
2.1.
intersections of a line
line parallel to
it
in
two or more
points.
The
single-valued
One reason
When
is
we take x
"
stretches
to right. The varying height of the curve above or below the horizontal shows the variation of y and we can see when the curve rises
y
(y increasing)
The
and when
it falls (y
decreasing).
40
prise
what are
function of
x,
and decreasing
the axis
Ox
com-
"
"
Subject to minor qualifications concerning the continuity of the
function (4.6 below), a significant property of a monotonic function
The
inverse of
throughout from
left
to right
The
first
monotonic, the
is
As x
not monotonic.
- f the value of
,
sometimes
branches ",
it is
two or more
"
The
is
explicit
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
41
The corresponding
and
curve, a circle,
is
--
two
single-
valued sections, one above the axis Ox and the other below. In the
same way, the second example of 2.1 gives x as a double- valued
function of y divisible into the two branches
a = |(/4y+17-3)
and
0:=
function
Such
as
Symmetry can be
the following
is
form as x as an
x
y
are seen to be of identical form. Graphically, such a symmetrical
function is represented by a curve symmetrical about lines bisecting
the angles between the axes. The part of the curve on one side of the
line is the reflection in the line of the part of the curve on the other
side.
The graph of xy = 3
42
is
is
nature
is
clearly
"
y=-3x; y-5#+2;
its
more
#-3 and
be included in the
y = l-2x.
single formula
y = ax+b,
The function
is
we can
ax+by +c~ 0,
where a, b and
two
The implicit
and
*=
(-
As a second example, we
is
coeffi-
function,
y=ax 2 +bx+c,
where a, 6 and c denote any definite numbers. In the same way, we
can have x as an explicit quadratic function of y. Putting either of
"
"
these functions into implicit form, it appears as a
polynomial
expression, containing
*
Tho term
"
linear
"
is
since, as
wo
is
repre-
line.
t The cases where a or 6 equals zero are a little troublesome (see 3.3 below)
but need not delay us here. Further, it may seem odd that there are three
coefficients in the implicit form and only two in the explicit form. This is,
however, only a matter of convenience (see 3.7 below).
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
43
Other implicit
of which
2
2
c, of which
xy 3 is one case, and the function type ax +by
x*+y* lft is an instance, are examples. We derive, therefore, a
wider function type, symbolised by the formula
-f c
xya,
= 0,
6, c, /,
g and
h,
unique
of forms we have not yet introduced and some of these types will
be considered at a later stage. The exponential, logarithmic and
write
the
first
may
be.
From
the other point of view, the function is treated as a whole and the
type includes a whole set of particular functions united by the
common
property of being
"
quadratic
".
The formula,
in fact,
44
c.
double use, we
and one of two
of view.
When
attention
is
When
be termed constants.
We
is
made
flexible
is
a function of x
4a
(y-a 2 ).
to
compare
"
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
is
x=
We
have solved
b-a*.
4a
y.
45
is
inches.
Finally, the use of parameters is carried over into the mathematical sciences, as is seen, for example, by the parametric role of
"
market prices in economic theory.
firm (under conditions of pure
competition ") must take as given the market prices that happen to
exist and we can assume its output is known for each given price
system. In combining the output decisions of all firms, we treat the
price system as variable and attempt to discover a set of prices consistent with equilibrium (however the latter
is
defined).
Prices are
Just as a symbol
is
simple.
of particular types
goes far
beyond
this
/(*,y)=o.
This
is
we need
46
we take/(#, y)
obtain a particular function
The notation can also be
for example, if
wo
2
2
16 or # 3 -fz/ 3 - '3xy = Q.
y = 2x, # +?/
applied, without confusion, to include even non-analytical functions.
Again, if y is an explicit function of x of any form whatever, we
can denote it by the notation
y =/()
This notation is clearly applicable to the case of a function which is
single-valued and analytical.* In such a function, y is defined as
equal to the value of a certain expression involving x, and f(x) can
be taken as a convenient way of representing this expression in x,
no matter what
we supply a
x 2 +3# -
its
definite
3
2 or -
usual to reserve the later letters of the alphabet for variables and
the earlier and middle letters for parametric constants. The letters
x, y z, u, v and t are most frequently used for variables, and, if these
is
do not
When
suffice,
77
and
* An
alternative, and in some ways a superior, notation is occasionally used.
Instead of writing y=/(x) to denote the single- valued function, wo write
y=y(x). This economises letters and enables us to write the dependent
variable by the single letter y when the dependence on x is not stressed, and
by the same letter with x in brackets when the dependence on x becomes
impdrtant. For an actual use of the notation in economics, see Frisch,
New
Utility (1932).
FUNCTIONS
the letters a,
6, c, ...
DIAGRAMMATIC REPRESENTATION
,
47
are
more
and
r,
q
conventionally used.
important, it is often useful to take
&, I, m, n, p,
to
denote
the
*, A, ft,
p,
parameters. These remarks
serve only as general guides
the context should be sufficient, in
any particular case, to make clear the nature of the symbols used.
The letters denoting functions are of different nature from the
or
and
/ and
g,
<f>
and
/r,
and
^
being examples.
It is, of course, essential to denote different variables, parameters
or functions by different letters. For example, if we wish to say that
fa, fa,
3 , ...
any implicit function gives rise to two explicit and inverse functions,
we must symbolise somewhat as follows. From the given implicit
function f(x, y) 0, we derive the two functions y = <f>(x) and x~*/j(y)
which are inverse to each other.
Functions refer to operations performed on variables, and it is
thus necessary to denote a function, not only with its operational
or functional letter, but also with an indication of the variable or
variables* to
and
integration, will
0,
a?
= J,
x = l.
but not
by
specified.
...
a, 6, c,
...
or
48
f(a) or /(a^).
variable are, of course, instances of parametric constants.
trate with a particular function, if
To
illus-
= x 2 + 33-2,
2
then
/(0)-(0) +3(0)-2--2;/a)-(J)2+3(i)-2^-J,
= (l)a+3(l)-2=2; and so on.
/(l)
= a 2 + 3a - 2
Further,
f(a)
Again, if/(#, y)~ is an implicit function, then /(a, y) = Q indicates
f(x)
As an example
If a
and h
any
f(a+h)-f(a).
The change
is
then
f(a+h)-f(a)
h
and
when
We
and
"
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
49
trary curve,
that
displays sufficient properties to make the drawing of an illustrative diagram worth while. In the first of the above instances,
now
the diagram would show a curve lying completely above the horizontal axis and falling steadily from left to right.
It is here that the diagrammatic method of illustrating analytical
arguments becomes important. The least service diagrams can
perform
is
to illustrate
some
analytical development.
It
is
cases
x and
y,
M.A.
50
minor
along the horizontal axis than it does when the other variable is so
measured. Since it is important to be able to recognise the same
FIG. 10.
through 180
about the bisector indicated, the new position taken up by the curve
is the position with axes interchanged.
in the first position
2.8
it
variable.
As an
re.
Our problem,
of x which
make
is
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
51
when f(x)
is
a polynomial,
There are linear equations (of the first degree), quadratic equations
(of the second degree), cubic equations and so on. A solution of such
an equation, a value of x which makes the polynomial zero, is
usually called a root of the equation. The process of finding roots
of polynomial equations, at least in simple cases,
in text-books on algebra.
The general linear equation
--
ax+b = Q and
fully described
this
in all cases.
is
is
is
known
to be
2a
It follows that there are
two
real roots if 6 2
> 4ac,
and no
real root
<4ac.
4ac, then the two real roots coincide and there is
only one value of x satisfying the equation, which reduces, in this
if 6 2
If 6 2
2#
o;
-#-l=0,
-3a+l=:0,
x2
+x + 1
0,
x-if and # 1,
a = (3+V5) and x^fi-JS),
no real roots.
In the
first
x*-2x*-2x+I^O.
By
trial
root
is
Taking out
The other
becomes
52
The complete
a=-l,
a?
= J(3+V5) and
a?
= j(3-/ 6
)-
- 2a; + l-0.
The graph of the function ?/-#3 ~2x z -2x +
Ex.
in Fig.
#3
1.
1 ]
-2.*; 2
where
1 is
constructed as shown
-2.v
-2X + 1
The roots of the equation are those values of x which make y zero, and so
must be obtained from the points where the curve of the graph cuts Ox. In
this case, it is seen that the plotted curve cuts Ox in three points and the
approximate values of the three roots are read off as
x=-l, z=0-4 and z = 2-6.
These are the values, to one decimal place, of the exact roots already
found.
z3 -3z-3=0.
3
Fig. 12 shows the graph of the function y = x - 3x - 3, and the curve
plotted is seen to cut Ox in one point only where the value of a; is a little
greater than 2. The cubic equation has thus only one root which is
Ex.2.
approximately equal to
2.1.
Ex.
last
example,
3
Fig. 13 shows the graphs of the two functions ?/ =# and y -- 3x + 3, plotted
on the same graph paper and using the same scales. The first function
gives a well-known curve and the second a straight line. At any point
where, the
curves
intersect,
the
given
cubic
equation.
13
Fig.
mately
is
to
Hence,
solve
any given
equation f(x)=0 approximately,
we need only plot the graph of
y=f(%) and determine where it
cuts the axis Ox. Or, we can
the equation so that it appears in the form (f>(x)^i/j(x), and
then find the x-co-ordinates of the points where the graphs of
y^=<f>(x) and y
$(x) intersect. In either of these ways two things
are determined, the number of the roots of the
equation and the
split
If this
is all
we
x*ax
where
+bx
+c,
a, b
Fig. 13.
* Various
numerical methods of improving upon the approximate roots
obtained graphically have been devised. The best known is that of Homer
see Burnside and Panton, The Theory of Equations, Vol. I (8th Ed., 1918),
pp. 225 et seq.
54
first
From a
single equation in
now
to the next
x and
two variables.
one variable, we pass
y.
/i (*> V)
and /2 (x,
y)
= 0,
where/! and/2 denote two given functional expressions. Such simultaneous equations are said to be solved when we have determined
a pair, or a number of pairs, of values of x and y satisfying both
equations. The simplest analytical device of solving simultaneous
equations is to obtain, from one equation, an expression for one
variable y in terms of the other variable x, and to substitute this
expression into the second equation. The result is an equation in
x only, which can be solved in the ways already indicated. The
following examples illustrate the method.
Ex.
1.
From
The
3x,
the
equations
a1a;+61y+c1 =0
The general
and
a 2#
and
"6
'
is
representing
points.
y=bx+c which
and
x = 1-8.
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
55
and/2 ( x
any
y)
>
0-
direct graphical
solution of
simultaneous equations.
We
how many
solutions
there
are
and
The
+ y* - 3xy =- 0.
a straight line and the
and
x*
first curve is
second a looped curve which has been
plotted already (in 2.2 above). There
and
P3
P P2
19
off
FlG
two equations
in
56
"
"
determinate
solution, i.e. there is only a definite
provide a
number of pairs of values of x and y satisfying the equations. This
is a question which will be taken up at a later stage (see 11.6 below).
We
can, however, consider here one objection to the method of solving equations as applied (e.g.) in economic theory. It is said that
"
"
a
circular
argument is involved when we write two equations in
no
x and
y,
is
of possible pairs
itely
known
(x, y) is
number
to exist between x
and
much
There
restricted.
y,
is still
an
indefin-
"
is
singly
only
Finally, if another relation is known and added to the
the possibilities are still further restricted and, except in odd
large
infinite ".
first,
cases, there is only one or a finite number of possible pairs (x, y).
In this case, x and y are said to be determined. In diagrammatic
terms, a pair of values of x and y is represented by a point P in a
plane.
positions of
and they
are, in general,
only of
finite
number.
put
indefinitely
related to the price
is
by a supply
amounts
the industry would offer at various prices), the values of x and p are
much more limited and there is, in general, only one or a few pairs
Here we say that output and price are deterThe two relations of demand and supply are independent
of each other, and neither alone determines both output and price.
of values possible.
mined.
There
is
no
circular argument.
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
EXAMPLES
57
II
A railway
and BC
EF, where
inches
lino
by x
it
variable point
AB4 inches.
is
and represent
#,
for
^x ^4.
beam
The appended table shows a simple way of obtainvalues of the quadratic function y 2x z - 2x 4- I
Extend the table to give the values of the function for
3 to 4- 3,
integral and half-integral values of x from
and plot a graph of the function. Find an explicit expressioii for x as a function of y and deduce that two
values ofx correspond to each value of y >\. Examine
the cases where y ^ \
4.
irig
2x 2
- 2x
-2
-4
4-1
r.
5x - 2x z
Show that y has a greatest
5. I'lot a graph of the function y
but no least value. Locate the greatest value as accurately as you can from
the graph. Between what values of x is y positive?
.
y2x -
Graph
indefinitely.
values.
2x
4- 1
58
explicit function of x
single-valued or not ?
11. Obtain
show that
an
it is
and x as an
explicit function of y.
not single-valued.
y=x + x and
12. 13y selecting a sufficiently large number of values of x and finding the
2
3
corresponding values of y, indicate that the function y 3cc -j- 3# -f x - I is
mono tonic. Does y increase or decrease as x increases ? Illustrate graphically.
13. Show that x*+bx+c can be written in the form (x + %b) 2 - J(6 2 -4c),
and deduce that y =x z -f bx -f c has a least value when x = - \b but no greatest
value.
Hence indicate the general shape of the curve y=x 2 +bx+c. What
is the condition that the curve lies entirely above the axis of x ?
Consider the
- x* -f bx + c in a similar way.
curve y
14. Combine the results of the previous example to indicate the nature of
tho curves represented by the general quadratic equation y ax z +bx + c.
Show that tho curves are of the same type and can be divided into two groups,
one group consisting of curves with a lowest but 110 highest point, and the
other group of curves with a highest but no lowest point.
15. A ball, thrown vertically into the air with a given velocity v, reaches
a height x after time t. It is known that x is the difference between two
independent factors. The first is the offect of the initial velocity v and is
measured by v times t. The second is the effect of gravity and is represented
z
Express x as a function of t involving the two
by a constant %g times t
parameters v and g. Taking g = 32, find the height of the ball after 4 seconds
if the initial velocity is 75 feet per second.
.
is
y cubic inches.
17. Write down the general symbolic form for y as a cubic polynomial
s
8
function of x, and show that functions such as
y = l -re , y=x(l +#*)
and y = (x + 1 ) (x + 2) (x + 3) are all included.
yx
18. How many parameters are needed to describe the general cubic
functional relation between x and yl Show that the general expression
includes such simple functions as
1
+l
*=? y= (sn)
19.
Show
and
*=*-*
-=, where
by y = ex + d
a, 6, c
/() = 2x + 3,
f(
i)
i- and
= 2x* - 4cc + 3 +
(c) f(x)
Explain
x
Zx ~H 1
cannot be defined in the second case and/(0) in the last case.
,8
21. If f(x)
=-
(b)
J(x)
Q/y.
O
,
why
FUNCTIONS
DIAGRAMMATIC REPRESENTATION
59
when/(#) =
(%x--\}(x 2)
f- -~s~~\~ X T~
A
*n
in terms of a,
^le ^ a^ er
flas^f
'JC
when f(x)~x*
3x-2 and
/1\
show that /( - } =/(a) for any
\Cl/
value of a.
Find the value of f(a +h) in terms of a and ft when /(x) =- f(x) x*,
^
x 1
2
Deduce an expression for the " incrementary
/(#)=! -2# HI id /(a?) 2x
l
24.
ratio'
f(a+h)-f(a)
h
in terms of a
25.
Find y as an
and when y
2/
and h
in each case.
explicit function of
~x 2 where x ~~
^wf
~i~ JL
x z +3.r -2 where
when y
The
variables x
an
x~\
+t
x=t z and
(a)
*-,
j^;
(6)
The
solution of equations
2
By writing factors, find the roots of each of the equations x - 3x + 2 =0,
+ 5 + 2~0, 6x 2 +x-2=:Q, x 9 + 6z 2 + ILc + 6 ^0 and 2# 3 -5x* +a; + 2 =0.
In the first three cases, check your results by means of the formula for the
29.
2a 2
81.
+ 2x - 3 = 0,
(# -fa) feet
and a
volume of b cubic
32.
Show
feet.
integral root.
+ 5# a + 4x -4 =0, a 8 + 1 =0,
60
number and
(a)
xs + x 2
-2x-l =0,
(6)
x s - 2x - 5 =0,
x* - 3x 2 -
(c)
=0.
y - x and y
-
---x*
+ x-2,
(b)
y ^x* and
y=2x
5,
(c)
=x and
2
3
has
35. Show graphically that the equation # -7# + 7
roots almost equal in value, and evaluate them approximately.
By
-f
~~
two positive
and of the
a &* + a 2x*
where the
must have
y ~-
and
+ a&c + a 4
39.
Show
fails
only
=~
when
ct z
and x - 2y + 5 = 0. What
by attempting
is
2
{
40. How many solutions are to be expected in each of the types of simultaneous equations (a) xy 1 and ax by c = 0, (b) xy = l and y ~ax 2 +bx+cl
Find, by graphical methods, the approximate solutions of
2
xy I and y = 5x - 2x
-I-
-!
41. The prices per bushel of wheat and rye are p and p 2 respectively. The
market demand for wheat is given by x l 4 - Wp t +lp^ and for rye by
x 2 3 + Ipi - 5y> 2 The supply oif wheat is related to the prices by the relation
x l ~ 1 +pi - p z and the supply of rye by the relation x 2 = - 27 ~p l + 2p 2 Find
the pair of prices which equate demand and supply both for wheat and
t
'
for rye.
42. In the problem of the previous example, a tax of ^ per bushel is imposed on whoat producers and a tax of t z per bushel on rye producers. Find
the new prices for the equation of demand and supply (substituting p^ - 1 for
p l and p z - 1 2 for p z in the supply relations above). Show that the wheat price
an amount ( I4t2 - 3^).
an amount
increases
^) and the
(9 a
by
ryo price by
Deduce that
(a) a tax on wheat alone reduces both prices
(b) a tax on rye alone increases both prices, the increase
;
Paradox,
Journal
of
Political
CHAPTER
III
WE
propose, in the present chapter, to follow up a line of develop(2.7 above) and examine, in some detail, the
between function types and curve classes. Our investigations belong to what is termed "analytical geometry" and our
method is to take certain well -known classes of curves in turn, determining what type of function corresponds to each class. We have
then an analytical method of treating the geometrical properties of
relation
(1)
The
distance between
P and Q
is N/(# 2
-#
2
3 )
-f
(y 2
2
?/i)
+2*2
2/i
fWi
\ p +q
p +q I
The proofs of these formulae,
in-
FIG. 15.
what
62
(1)
PQN,
gives
PK ^LM = OM-OL^x
since
- xlt
and
PQ = V (z
'
Hence,
- ^) 2 + (y a - &)*.
Q.B.D.
is
LN
E
LN=ON-OL=X-XI
and
x-xl =x 2
So
-y
Hence,
(3) If jR
if
and,
a?
= Xx +X%
-
divides
PQ
# 2 -x
we
obtain
similarly
J
Formula
y=
+2/2
y--^^
g,
T,
Q.T^.D.
then
so that
and
xt
then
2^1
similarly
(x, y)
x - a?!
Simplifying,
"I
and
^,
LN = x
and
xL
2x
i.e.
=.
>
P+2
Q.E.D.
is
the
(2)
(3)
The point
(1)
dividing
OP
/
3.2
The gradient of a
in the ratio
above
results
63
fixed
(\x, \y).
q has co-ordinates
py
p
p*
p
straight line.
y
\J
\x
FIG. 16.
is its
direction
If the angle a
is
slopes upwards from left to right if a is obtuse, the line slopes downwards from left to right. The angular measure of the direction of
a line, however, is not metrical. It is, therefore, inconvenient
for most analytical purposes and a metrical indicator of direction is
;
needed.
Such an indicator
is
readily provided
by making
precise
A straight line is a locus of" points in"a piano and thus a curve. It can,
case of a curve which does not
however, be regarded as the
limiting
"
"
curve at all.
*
64
"
PQ
PN. The
NQ
16,
NO
ratio
PN
and can be
rise
per
r
Ox
is
Here
PQ
referred to the
NQ
Oy
Fig.
over a "horizontal"
DEFINITION
axis
"rises" a distance
Hence
We
if it rises
Ox
is
straight line and
cuts the parallel to
through
through Q.*
the points
it.
PQN
known
M
'
geometrical property of
such triangles gives
NQ
FIG. 17.
N^Q'
P'N'
PN
'
The ratio is thus the same for all selections of P and Q. Exactly the
same result follows if P' and Q' are any points on a line parallel to
PQ. Hence, the gradient of a line depends only on its direction and
all parallel lines have the same gradient.
It must be stressed that the lengths NQ and PN of the gradient
ratio must be given signs according to the usual conventions. It is
easily seen that the gradient of a line sloping
"
upwards from
"
left to
* The
of the line. If a is
gradient is sometimes referred to as the
slope
the angle the line makes with the axis Ox, then the gradient is the trigonometric tangent of a, i.e. gradient tan a.
is
positive
negative.
line
PN
upwards, NQ
In the second diagram, where the
negative arid
65
PN
line slopes
downwards,
NQ
is
i.e.
positive,
show how
the steepness of the line. Since all parallel lines have the same
gradient, we can draw lines through
y>
18 shows a
O for convenience and
Fig.
number of such
lines sloping
upwards
OM. Then
same way,
thus established
(1)
as the line
Fio. 18.
The following
results are
The gradient of a
line is
all
parallel lines
(2)
(3)
line,
the larger
is
its
gradient.
Two
steep and tends to coincide with Ox, the gradient decreases and tends
to zero. Again, as the line becomes more steep and tends to coincide
with Oy, the gradient increases indefinitely.* Hence, the gradient of
line parallel to
Ox
is zero
and
the gradient of
line parallel to
Oy
is
indefinitely large.
straight lines
is
independent of the
'
tends to
infinity ",
M.A.
66
m ~m
-1.
l
2 and perpendicular if m^xm^
The first of these results needs no further proof we have seen that
parallel lines have the same gradient. The proof of the second result
proceeds
In Fig.
19,
to
MQ.
Hence,
MP x MQ =
^ ,,
OM.
TTV?
OM
or
~~ *
x wi 2
also be written
wii
or
m =
The equation of a
3.3
straight line.
two points on
the line or one point on the line and the gradient, are known about
Our problem now is to find the equation of the line referred
it.
some
to
i.e.
and
its
gradient
is
known
to be
__
~~
m.
m PN~OM-OL
for
yj
16,
x-xi
(x, y)
on the
y-yl =m(x-xl
line.
Hence,
m passing through
............................ (1)
67
Next, suppose that the line witli equation (1) also passes through
a second fixed point with co-ordinates (x 2 y 2 ). These co-ordinates
must, therefore, satisfy the equation, i.e. equation (1) holds when
>
x2
is
v-u^m(x~x)
&
y
&
j.
i/
or
m =?*^.
X
X
,.,
Hence,
The gradient of the straight line passing through the two fixed
e equation of
points (#!, t/i) and (x 29 y 2 ) is (y 2 ~2/i)/(^2~^i)j an(i
the
line is
The equation
(2)
is
whole
gradient
"
as a
"
linear
The converse
straight line, in
"
is
type,
i.e.
also true
form
(1)
or
(2), is
seen to be
ax+by +c~0
.............................. (3)
can be written*
we have a
When 6 =
68
On comparison
we
(1),
-j and
passing through
must represent
-
-,
Oj.
is,
So,
line
and
straight lines
(3) is
given by -T,
i.e.
the gradient
*%#
+ b^y + q
and perpendicular
and
-- 1 = -
if
lines if
-~
is
is
minus
written
+ b 2y + c 2
a%x
-, i.e. if
=-
-^
o^a +&J&2
1, i.e. if
0-
when the
results
Ox has
gradient
m equal to zero
y-y^
or
and so
y~y\
its
(1).
The
A line parallel to
equation
is
constant.
*-ai=-(y-yi)
x - #! =
which
or
x = Xj
= constant,
parallel to
Oy when
69
0.
when a =
and a
line
if c
= Q, when
it
ax
3.4
The parabola.
parabola
is
point
is
is
and the
d
FIG. 20.
line
KS perpendicular from S to d is
distance of S from
The
d(SK) denoted by 2a, where a is some given
constant. The general form oft/he parabola is shown in Fig. 20. The
curve is symmetrical about its axis KS and must pass through the
is
70
the
is
way
is
vertical,
The
still
i.e.
parallel to Oy.
is
is
is
FIQ. 21.
is
above the
SPMP. But
and MP=NP +MN=y -fa.
SP = Jx
+(y-a)*
a;
So,
and
this,
+(2/-a) -(2/+a)
y=x
2
.
4<x
On
are
- a) and d
if
is
is
argument exactly similar to that given above then shows that the
equation of the parabola
The
following result
is
is
thus established
is
axis vertical
y=^ax* where a
is
is
;
71
if
is
The numerical
Suppose, now, that the axes are selected so that the vertex of
the parabola has co-ordinates (, 77), the axis of the parabola being
parallel to Oy as before. Then, if S lies above the vertex, the coordinates of
a distance
are (,
(77
On
77
- a) above
P is
+ a) and the
If
directrix d
is
P is
parallel to
-f) +(y
-?7)
Ox and
on the parabola,
- 2a(y
-77)
-f
a ~(i/ -y)
-f
2a(y
we obtain
-77) -fa
2
,
Similarly, if
lies
is
So,
is
77)
(y-rj)=a(x
-)
axis vertical
2
.
y=ax 2 +bx +c
can be written (by completing the square in x) in the form
b \2
6 2 - 4ac
72
i.e
Comparing
this
we deduce
The equation yax 2 +bx +c, for any values of the constants
and c(a7^0), represents a parabola with axis vertical.
The constant a is
of the parabola
is
is,
a, b
b2
There
therefore, a correspondence
3.5
pendicular lines
is
angular hyperbola.
convention
its
asymptotes.
22.
shown
in Fig. 22.
There
is
one
PM
* The
quadratic function and its graphical representation have been considered in the previous chapter (e.g. Ex. 1 of 2.2). From our point of view,
parabolas are important because they represent such a simple and useful
function typo as the quadratic.
73
vertical
asymptote increases.
varying the positions of the asymptotes and the value of the constant
a2
The general shape of all curves is the same but the particular
.
4-
xy*
3--
of a rectangular hyperbola
here, we take the co-ordinate
when the
If
is
any point
(x, y)
on the rectangular
But,
So,
is
2
xy = a where
,
a2
is
a constant.
a2
a2
,
showing that y
and conversely.
is
74
In the general case, where the asymptotes are parallel to the axes
and the centre of the curve is at the point (f 77), the distances of
any point (x, y) on the rectangular hyperbola from the asymptotes
are seen to be (x - ) and (y - 77) respectively. The equation of the
curve is then provided by the condition that
,
to the axes
in that (x
is
- g)
is
in x,
-f
6X
On
-x
-\
a2
Comparing
a%
we deduce
d-i
xy
i.e.
^ 0.
a2
form
The equation
y~
~,
for
The
is
at the point
r
a8
<V
The
class of
75
The
is
in
circle.
The
fixed point
is
The
circle.
a curve discussed in
radius.
circle is
origin,
method described
circle,
If the origin
is
is
found
in 2.3) to be
x*+y*=a*,
where a
This
This
is
is tjie
the radius.
is
general equation of a
circle.
coefficients of
(x 4-la)
Our expression of this result is not quite complete. The function typo
~
only represents a rectangular hyperbola of the form considered if (a a &i #1^2)
If that quantity is negative, the curve represented by the function
is positive.
- 2 This is a rectangular
hyperbola lying
type is of the form (x f ) (y -rj) = a
in opposite quadrants of the plane to that shown in Fig. 22.
The function type represented by a rectangular hyperbola (i.e. the ratio of
linear expressions) will be considered particularly in the following chapter (see
.
Ex. T of
4.2).
76
|#,
c> J(a 2
If
no
i.e.
is
a negative quantity,
last case, the locus
In this
all.
represented
c<(a
If
+6 2 ), the equation x 2 +y 2
definite circle
+by +c
represents a
Ib) and with radius
|a,
-{-ax
Hence,
We
the
can
field
now pass
is
Our
results can
Curve
Straight lines
be summarised
General equation
class
......
....
ax + by+c=Q
yax
+ bx+c
al x+b
x2
Circles
2
-t-i/
-{-ax
+ by +c =0
is
a double-valued function of
y.
The general
77
circle gives y as a double-valued function of #, and conThese results correspond to obvious geometrical properties
of the curves themselves. For example, any parabola is cut by a
equation of a
versely.
The number
no point or
in
it is
cut
by
two
points.
of parameters in the equations of the different curve
The
classes is significant.
curve.
Special sub-classes of a complete curve class can also be conIn a sub-class, the number of parameters in the corre-
sidered.
class,
is less
by a
is
single parameter.
described as a system of curves.
We can define, therefore, various
systems of straight lines, parabolas, rectangular hyperbolas or
Ex.
1.
a given gradient.
In the linear equation ax + by + c = 0, both a arid
6 ^ 0, we can write y = ocx + where a = and fl = *
/?
a?y+p' whore
<x'
= --b and
j3
or
<x'
=
0'
and
c
.
6
;
cannot be zero.
if
If
ci
/?'.
=~
r^
Qi^K 4* 02
We
78
2.
origin is defined
where h and k are fixed positive numbers (h> Jk) and a is a positive parameter. Any parabola of the system has vertex at a point {h (a - 1), -k}
2
lying on a fixed line parallel to Ox, and its focus is a distance |a from the
As the parameter a
directrix.
moves to the
and the parabola becomes
right
flatter.
cuts
Ox where
xh(a -1)
2/=0 and
point, at the
values of x considered,
point where
where # =
yh
3.
defined
from the
origin.
Notice
taken.
quadrant
where certain
drawn.
Ex.
-k.
[l--j
\
QS
of the
is
The
axes
farther
is
and
at the
- h.
at one point
2
/
1\
2
Oy
the
FIG. 24.
xa(h- >Jk)
As a
i.e.
24,
are
by
Here
is
a parameter.
(x+h)(y+k)=a,
i.e.
-h, -k).
= 2, k = 1
are
shown
79
in Fig. 25.
FIG. 25.
x+y '{-*J%xy=a,
where a
O^x^a,
is
assumed
positive.)
a)
the equation,
it
From
follows that
80
Any system
represented
of curves defined
by a
single
parameter a can be
by the equation
/(a?,
y\ a)-0,
a, i.e.
/(a?,
y)=a.
x +h
:
fl
Vl/
+Kr
a,
(x+h)(y+Ic)=a
and
x+
Non-intersecting curve
respectively, i.e. in the form f(x y)a.
are
of
interest
in
economic
particular
theory (see 5.7 below).
systems
t
An
The commodity
is
A! and the consumers in the other part buying from the firm at ^ 2 -t
The solution of the problem depends on what is assumed about the
"
"
at works
charged by each firm, and about the nature of
price
the transport costs from factory to consumer. It is assumed, here,
* If the curve
systems of Figs. 24 and 26 were not confined to the positive
quadrant in the way shown, they would cease to be of the non-intersecting
type.
t The solution of this problem, as given here, is based on the work of Prof.
See Bemerkungen zu einer Theorie der Raumwirtechaft, EconoSchneider.
metrica, 1935.
81
that the factory price p per unit of the commodity is the same for
both firms. Further, it is taken, that the transport cost varies
ideas,
we can
take
t2
>tly
so that
it is
if
A2
then he
he buys from
A t and
is
for the
two
F IO
is
AA
27.
is
the
f y2
and
i.e.
(z+a)
t^(x
+y +2ax
and
+2/
-fa
s9
= >/te^o) 2 -l-vi
- 2 V(z-a) 2 +7/ 2
= t 2 2 (x z -f y 2 - 2ax fa 2
,
2
)
"
(/ 2
-/j.
),
).
we have
The boundary is then seen to be a circle with centre at (6, 0) and with
The circle has centre beyond A 2 on the line A^A^
radius s/6 2 -a 2
and encloses the point A 2 as shown in the figure. On the assumptions
.
M.A.
82
we have made,
circle,
at
outside the
by
circle.
all cases.
EXAMPLES
The
III
straight line
1)
Obtain an expression for the distance between the points (a^ 2 2a^)
2aJ 2 ), where a, ^ and 2 2 ar constants.
2.
and (aV,
Show
3.
(1, 1),
3,
1)
and
4, 1)
form a right-angled
triangle.
Show
4.
1
(is/3,
5.
- V3) an equilateral
(2,
triangle,
(5, 2),
C (3, 8) and
show that the quadAC and BD have the
(20, 10),
same mid-point,
i.e.
An
dicular
and
is
of length
s/3 respectively.
8.
(2, 1) (a)
with
a gradient of
9. Show that the line joining the points (a, 6) and (ka, kb) passes through
the origin whatever the values of a, 6 and k.
10. Find the equation of the lino joining the points (4, 3) and
deduce that the point (1, 1) is collinear with these two points.
11.
Show
2,
(2, 1)
1)
and
passes
passes through
13. Find the gradient of the line 2x - 3y -f 1 =0 and the co-ordinates of the
Hence, describe the simplest method of
points where it cuts the axes.
plotting the line on squared paper.
14. By finding the condition that the point (#, y) is equidistant from the
- 1, 2), obtain the
points (3, 1) and (
equation of the line which is the perpendicular bisector of the line joining these points.
83
2x - $y
lines
should
we expect
this?
Use tho
19.
20. Plot a graph of the curve y x . Mark the position of tho focus and
directrix of this parabola and verify that points on tho curve are equidistant
from focus and directrix.
z
positive.
Examples
II, 14.)
22.
By
yax*+bx+c
24. Find the centre and the asymptotes of the rectangular hyperbola
xy - 2x - y - I = 0. (Cf. Examples II, 9.)
26. If a point moves so that the difference of its distances from the fixed
points (a, a) and ( - a, - a) is always 2a, show that the curve described is tho
2
rectangular hyperbola xy = a
.
N/2a, 0),
27.
circle
circle
circle
(2,
f)
whose
equation
84
30. From (ho it 'suits of Examples Fl, 38, deduce the length of the chord
cut off the lino 2.T-//+3
by tho rectangular hyperbola xy 2, and the
z
2
length of tho chord cut off the line x - 2y + I
by the circle x +?y =9.
31. Re-examine the problems of Examples II, 40, in the light of the results
of the present chapter.
32. Draw a diagram to illustrate the system of curves y^a^-x*, where
^.T <a and where the positive square root is taken. What are the curves ?
33. If h
that y
(x
^ x ^ aV& - h,
+ h) 2 where
9
only the parts in the positive quadrant being taken. Draw a graph of certain
curves of the system when. h~5 and k -~ 25, and verify that each curve is
concave to tho origin. Compare with the system of parabolas of Fig. 24, where
each curve is convex to the origin.
34.
Show
CL
^ x ^ h - Kr and where h and
,
k are
and Q^jL-^a.
11011- intersecting
arid
convex to the
origin.
36. In tho problem of 3.8, two firms are 10 miles apart, the price of their
product at works is the same for each and transport cost per mile per unit of
the commodity is throe times as high for one firm as for tho other. Show that
the former firm supplies an area within a circle of radius 3J miles. Draw a
graph to illustrate the distribution of the market.
problem of 3.8, the two firms are 2c miles apart, tho prices at
p x for one firm and p a for tho other and transport costs are t per
mile per unit of tho commodity for each. Show that the curve separating the
areas supplied by the firms has equation (referred to the same axes as in 3.8)
37. In the
works are
~-^- = l,
where
distribution
a^-~^
when p t ~
32,
and
pz
6s
40,
c 2 -a*.
=l
and
2c
= 10
miles.
CHAPTER
LIMITS
4.1
WE
IV
limit.
must
first
itself
and
limit.*
we
j,
1
2>
For example,
care to specify.
23456
23456.
*j,
o,
r,
*t,
<?'
'4>
5?
6?
\j
...
?>>
are
coming to an end.
This
is
tinuation.
we can always
find a
it.
The
86
In the other
class,
out limit.
On
is
a member,
is
such
that the numbers steadily approach nearer and nearer to the value 1
without ever attaining this value. We can get a number as close as
we
second class tends to some definite number as a limit and, since the
any member of the sequence and the limit is sub-
interval between
i.e.
reversed.
Two
9
^
0,
-1,
2~>
3^
-2,
5
4>
-3,
-4,
J5J
6">
...
Again, there are two classes, one class illustrated by the first and
the other by the second example. In a sequence of the first class,
the numbers grow indefinitely larger numerically, but through
negative values instead of positive values. Such a sequence is said
to tend to minus infinity and we have the idea of the infinitely large
"
"
"
and negative, of minus infinity as the counterpart to infinity ".
In the second class of sequence, the numbers tend to a limiting value,
1.
* It
may be noticed that we have given no justification for the statement
that there are only two classes of increasing sequences, those tending to infinity
We have not excluded the possibility of
and those tending to a finite limit.
other cases of increasing sequences. It is, however, a fundamental property of
the real number system that cases other than the two here mentioned do not
must assume the result without proof here. In passing, we can
exist.
remark that the same property is not true of the system of rational numbers
only. An increasing sequence of rationals may tend neither to infinity nor to a
rational number as limit. This is, in fact, the way in which irrational numbers
can be defined as the limits of increasing sequences of rationals not tending
to infinity or to a rational limit. For a discussion of these fundamental points,
based on the work of Dedekind and Cantor, see Hardy, Pure Mathematics
(3rd Ed., 1921), pp. 1-31.
We
LIMITS
87
113
"
4>
4>
2>
2>
7.
6s
C>
"
may
"
oscillate
"
possibilities holds
s?>
3,
5,
TJ-,
...
ways.
(1)
tend to
or
(2)
tend to minus
or
(3)
tend to a numerical
or
of such a
is
1>
any of the
An example
sequence
(4) oscillate
infinity,
infinity,
limit,
without tending to a
limit,
is
to division) and they are merely two aspects of the same essential
notion of order and continuation.
Further, the notions of the
limit,
of the
infinite,
88
and of continuity
4.2
Examples of the
limit of
is
a function.
the extension of the concept of a limit,
examples below
definitions.
1
Ex.1.
y = l- x
function,
-4
-2
way that,
as the ^-sequence increases indef-
-2-
FIG. 28.
LIMITS
89
^-sequences
is
tends to 1 as
y^-l-x
1.
Ex.2.
?/-o;
The following
+3#-2.
tables of corresponding values arc obtained
Jt follows that,
to infinity
shown
x tends
to
minus
infinity.
Ex.3.
left.
=>!.
The following
in Fig. 29
is
obtained.
90
In this case,
it is
an
as x tends
when x
to infinity or
minus
But, as x
the function
Hence,
tends
y~z
x*
infinity.
all
is
zero.
crease indefinitely.
to zero.
Hence,
is
the function
y =x
-^
tends to infinity as
The curve
we move
x tends
axis
Ox
as
x
behaves
in a similar
in
5,
ically
Fig.
in
one
way, except
important particular. As x decreases in numerical
4
-4
value,
increases
positive
negative
when x
is
negative.
Hence,
the function
x tends
Ex.4.
is
y=-x tends
and tends
to
minus
but
y is
positive and
indefinitely,
when x
to infinity
infinity as
as
y=
The graph of
this function is
shown
infinity.
Ex
5.
y=
(1+
y~
LIMITS
91
From
shown
these tables,
in Fig. 30, it
is
the,
function
y= -{(1 + #) 2 -l}
Lends
greater than 3)
to
The
Fio. 30.
8)
a single-valued function.
of numbers.
is
is
the.
92
therefore, to
We have,
at our choice
the
first
blank
is
then determined
infinity,
we observe
the
possibilities
(a) The values of f(x) may be positive and becoming larger and
larger as x increases. The value off(x) can be made to exceed any
/(#)-><*>
#->QO
Lira f(x)
or
= <*>.
X-+CQ
yf(x)
rises indefinitely to
/(#)->
oo
as
x tends to
#->co
or
Lim /(#)= -
oo
symbolic
re-*- oo
falls indefinitely
(6)
of Fig. 31).
(c) The values off(x) may form a sequence approaching a definite
value A as # increases. The value off(x) can be made to diifer from A
by
as
little
value.
infinity
as
we
please simply
f(x)-+X
*
The
by
allotting to
#->oo
or
a; a
sufficiently large
limit A as # tends to
Lim /(#)=A.
in
sufficiently rigorous from a purely analytical point of view. For more precise
See also Examples IV, 19 and 20.
definitions, see Hardy, op. cit. 9 pp. 162-8.
LIMITS
93
The curve y=f(x) now approaches nearer and nearer (from one side
we move indefinitely
as
we proceed
in
O
FIG. 31.
The
2x+l
as
as
x-l
as
as
as
as x tends to minus
For example
infinity is defined
as
as
<x>
as
and denoted
94
(2)
The
The problem of
definition here
is
a in the limiting
process.
x^a+
as
/(#)->A
or
Lim
Z-HJ +
f(x)=X
values
less
f(x)->X
x->a-
as
or
Lim
f(x)~\.
x-+a
Finally, if
it is
and as x->a
(written x->a).
we say
f(x)->\
as
x->a
or
Lim
If the limits as
xa.
being finite in one case and infinite in the other. In the cases of
curves (c) and (d), the limits as x->a + and as x-*a - are different,
both being
other.
finite
in
infinite
in
the
LIMITS
The
--
>00
>
The
GO
as
x >0
as
x-*Q
-f
as
x >0
>2
>
as
as
x-\
oo
95
4-
as
as
#->3 +
and
y~>6
as
#->3 -
by these examples.
(b)
(c)
by
definition, the
96
taken.
5.
3>
49
5>
6)
j6
7>
To
when we come
is
fix ideas,
x-l
it
is
is
And
large.
2x+l
The
is
x -> <x>
this statement,
put
x~ 100
201
V-~99n
x-l
which
large arid
is
To check
the approximation.
is
value of x
we
-2-0303...,
limit of
On
limiting value.
serves as
nothing by itself and must never be detached from its context. The
"
"
x tends to infinity ", or its symbolic expression x->cx> ",
phrase
is
to be taken as a whole
it is
is
in the value
LIMITS
07
Some
properties of limits.
Two
</>
values.
The
<f>(x)
+ $(x) ->A-ff*
as
(2)
(f(x) -ifj(x)~>X~fji
as
(3)
(>(x)
#->o>.
as
^(#)->A/^
as
value
/z,
the value of
(e.g.)
the
sum
illustrated
Ex.
1.
The function
The method
is
>0 as
a?
>oo
Hence, by result
2+-->2
x
as
#->oo
(1),
M.A.
98
Ex.2.
We know
that
2x + 1
_-~>2 and
x-1
>l as #-^<x>.
But
x*+3x-l
X [X
From
JLy
~~
JL
~~~
J.
>L
rr
Ex.
3.
Since
as
X~>OO
2x + l
1
~->2 and
>0 as x ->oo the result
x 1
x
,
~^\j
as
(3)
shows that
S/'^QO
is
<j>
limit 2, while if
<
(x)
= |0 (x)
|.
And there
many
infinite
limits.
4.6
The continuity of
functions.
The definition of a function is based on the correspondence between values of two variables to each value of one variable there
corresponds a definite set of values of the other variable. The
variables themselves may be continuous (in the sense, that the
number system is continuous) or they may be discontinuous. But
;
The
is
LIMITS
are continuous
99
distinc-
we
we
at one value of x.
Point continuity
than
significant
general continuity.
i.e.
The
is
mathematically more
as continuous at
is
described
x=a.
x=a
on the curve at
there can be no
jump
in the curve as
we
pass through P.
A curve is
curve
(c)
is
100
The formal
and
DEFINITION
definition
at the point,
is
is
continuous at
x=a
is
if
that
way
The
a point
is finite
at
all
values of x near
xa in such a
Lim /(#)/(#).
and
ditions that/(#) assumes a definite value f(a) at the point and that
f(x) tends to the same value as x approaches a from either side. The
conditions correspond to the diagrammatic conditions that the curve
y=f(x) should have neither gap nor jump at the point in question.
now a
simple matter to extend the definition to include conin general. A function is continuous over a
a
function
of
tinuity
x
if
it is continuous at every point of the range.
of
of
values
range
On the other hand, a function is not continuous if it exhibits at least
It is
If a function
smooth
smooth
"
").
curve
(using
Smoothness is,
(a) and
The
the
in fact,
(6)
2),
2
equation y = I +/(x- I) and it is continuous since it can be drawn
without taking pencil from paper. But it is not smooth in the usual
"
"
sense since it has a
at the point where rc = l.
sharp point
If a function is discontinuous in a range, it must have at least one
LIMITS
101
tinuity fails to obtain. In diagrammatic terms, the curve representing the function has at least one gap or jump somewhere in the range
the function y=f(x) at such a point x=a is infinite in the sense that
"
"
GO as x->a. The curve
goes off to infinity as we approach
f(x) ->
12"
9-
-4
-2
(d)
X
o
-12
FIG. 33.
represents a rectangular hyperbola with asymptotes parallel to the axes (i.e. the function which is the ratio of two
linear expressions in x) always includes one infinite discontinuity, at
the point where we have the vertical asymptote of the curve. The
curve (c) of Fig. 33 shows a rectangular .hyperbola witli an infinite
discontinuity at x = l. Infinite discontinuities may be troublesome
but they can be allowed for, in mathematical analysis, by the device
of infinite limits.
The
jump
in the
102
is
chapter,
it is
many
Since no essentially
new
An
it is
detail.
between x and y usually gives y as a multivalued function of x. The ideas of limits and continuity, as applied
to such a function, necessitate the separate treatment of each of the
implicit relation
of which
The
is
limit of each
LIMITS
continuous and
fit
in such a
way
103
curve can be drawn without taking pencil from paper. On the other
"
"
hand, points of discontinuity (whether of the infinite or
jump
kind) may appear on one or more sections of the curve.
To take an
and
- Jx 2 -
9,
dencies.
by broken
x2
4-
circle
When
*a
multi-valued function
Fia. 34.
and continuity
still
valued function x 3
indicates that
it
apply in general.
-f j/
is
We
But the
ideas of limits
- 3xy ~ 0. The
graph of this function
triple-
(Fig. 7)
EXAMPLES IV
Limits of functions
1. By giving x an arbitrary sequence of increasing positive values, find
the limit, as #->oo of each of the following functions
:
Illustrate graphically.
-x
-x
2.P
+a?
+ 2x + 3.E 2
limits obtained as
x -> -
oo ?
104
What
2.
of the functions
Noticing that
and
(a)
sum
the
3.
(c) is
the
sum
of
(a)
and
(6),
why
01
Show
that
sum
x+
oX
cannot be obtained by
+2
Show
and
1)
Why cannot
that
tiC
->- as
4
of
- be deduced as tho
x+2,
x-+<x>
What
;r
sum
percentage error
of tho limits
involved by
is
to differ from J
6.
the product of
or product is
(d) is
4-1,4.
a;
5.
Explain
4.
and that
(6),
+ 3a; +
2s; 2
by
less
100?
than -005?
by writing numerator and denominator as x f a^ 4-- ) and a; f a 2 -f-~ ) respectively and by using the general results for the limits of sums, products and
quotients. Check the validity of the general result by reference to tho
7
Find an expression
7.
that
it
between
=-
a z x+b 2
and
a2
and show
example.
By methods
8.
a^x -
+ b~tx
-f
GI*
a^c* +bzX-^c 2
What
at
-->!
*
as
az
when
is
-f c,
positive
#->oo
is zero?
Check this
two examples above.
or a 2
first
and
2/
= 2o;-3+-, show
x
that 2/->oo
result
sign of a
as x-+Q
and as
x -^oo as
relation
2/-VQO
LIMITS
Show
12.
Show
13.
limit of -
that -I-
----
(
x\a+x
a/)
as #->0,
~{~
and
finding the
by
generalise
as tho value of -
Deduce
-x}
is
\/l
that, as x ^0,
{1
x\l+x
long as x ^-0.
as x-*Q.
14.
x^ 0-1
by
-a 3 }.
-X l)->-l
\L
Generalise
105
N/i
-x}-+\.
By
{1
1 r
when
+ s/1 -x}
as
a similar method,
-#}-^l as #->0.
falls
17. P is the point with abscissa a, and Q the point with abscissa (a +x) on
tho curve y=x*. The line through
parallel to Ox cuts the line through Q
parallel to Oy in the point L. The ratio of LQ to PL is tho gradient of the
chord PQ. Find an expression for this gradient in terms of a and x, evaluate
its limit as x-rO and explain the meaning of the limit.
(The results of this and the previous example illustrate problems of fundamental importance in tho development of the following chapters.)
18.
sides
A
is
of the portions after tho first a rectangle is formed with height equal to the
vertical distance from the left-hand end of the portion to the hypotenuse of
tho triangle. Find an expression for the sum of the rectangle areas and
evaluate tho limit of the sum as n-^oo . What is tho meaning of the limiting
5
value?
19. Show that a more rigid definition of the idea of a limit of a function is
provided by tho following
Tho function /(#) tends to tho limit A as a: tends to a if, for any selected
small quantity c, we can find a small interval a-S<x<a + 8 such that
{/(#) ~M i g numerically less than e for any x of the interval.
:
large,
Continuity of functions
21.
illustrate graphically.
+a?
106
- -
4- 1
tend to infinity ?
What
Indicate
its discontinuities.
x-x +
Illustrate graphically.
26.
Show
= -i
-^
-
<
if
Examine
6 2 2 4a 2 c a and tends to infinity for two values of x if 6 2 2 >4a 2 c 2
also the case where 6 2 2
4o a c a
Interpret in terms of the continuity of the
function.
.
27.
Show
that y
x 2 - -1
x 1
is
continuous except at x
= 1. What
is
the nature
of the discontinuity at this point? Show that the function becomes com1 is inserted.
pletely continuous if the value y =2 at x
28. Describe the discontinuities of the step-function, illustrating with the
function defined by the table
:
The
the value
case a
31.
= 1 ? Deduce
the limit of
is
l+an
defined as taking
its
that
it
repre-
of the curve.
CHAPTER V
FUNCTIONS AND DIAGRAMS IN ECONOMIC THEORY
5.1 Introduction.
ECONOMICS
exist,
applicable
An
and can be
when
convenient.
is
it is
sometimes convenient
108
assume that
it
And this
is
enough
for the
demand
we have demand
or cost functions.
such curves and relating one curve to another are extremely useful.
At least they throw into prominence just those points we are attempting to make in our main argument.
We can now pass to a consideration of some of the functions and
"
regarded as normal ". Mathematics is the servant of the sciences.
not thejna&tfil. The present chapter is divided into two main
sections. In the first section, we are concerned with those economic
functions which are expressible directly in explicit and single-valued
form, with demand and cost functions in particular. In the second
section, we pass to more complicated cases where the economic
functions employed appear in implicit, and not necessarily singleHere we are concerned with function types and
valued, form.
indifference
maps
".
where there
is
pure competition
109
(1)
(2)
(3)
all
X
are fixed and known. The amount of X each consumer will take can
then be considered as uniquely dependent on the price of X ruling
on the market. By addition, it follows that the total amount of X
(4)
<f)(p)
all
the
vertical.
demand
we
con-
110
the old in a
way dependent on
the factor.
A 'shift
in
relation.
To take an
illustrative case,
The
this point at
some length
It
111
the demand for (e.g.) sugar can only be defined for a limited number
of isolated prices, for (say) prices at halfpenny intervals from Id. to
"
"
6d. per Ib. Given the relevant data, the demand
curve for sugar
a continuous variable
But
it is
first sight.
Sugar
be quoted at 2d.
may
five Ibs. for Is. Id., Is. lid., Is. 2d. or Is. 2jd.
and so
on.
by
at
Hence,
taking
mined
continuous range.
But, even when p varies continuously, it does not necessarily
that
follow
x varies
On
the contrary, it
reasonable to assume that
tinuous.
is
demand
varies
"jumps"
as
by a series of
price
__
Flo
increases
and
is
the
demand
112
fitted
"
if
We need
of the continuous
out the limitations of this continuity assumption. We proceed, therefore, on the assumption that demand is a continuous function of a
continuously variable price. The assumption is made for purposes
of mathematical convenience
it can be given up, if necessary, at
the cost of considerable complications in the theory.
;
5.3 Particular
demand
It is
demand
larger
is
(j>(p)
and
p = $(x).
and
illustrative cases.
The
first
curve
is
113
first,
(for prices
SUGAR
5
Ibs.
Ib.)
SUGAR
10
15
per month
P\
9-
20
4O
20
Mn.
Ibs.
GO
8O
per month
CIGARETTES
* 3--
-4-
30
60
90
120
FIG. 36.
The family never demands more than the " saturaamount of 17 Ibs. per adult per month. The demand curve
tion
cuts both axes and is first convex and then concave to the price axis.
The shape of such a family demand curve can vary, of course, over
a wide range for different families and different goods. The form Dl
slowly again.
"
is
demand
of a large
market for sugar, taken as typical of a good with no closely related
substitutes. The market demand becomes zero at Is. 9d. per Ib.,
no family making any purchases at this or any higher price. The
demand then
increases at
M.A.
114
until approximately 80
prices.
Mn.
Ibs.
could take a
small at 9d. per packet and increases rapidly as the price falls,
becoming very large when the price is 5d. per packet or less. The
demand curve cuts the price axis and, since a small price fall results
in a large increase in demand, it is nearly parallel to the demand axis
most of its course. The curve must cut the demand axis at some
for
is
(1)'
v
~~,
b
(5)
#=
(7)
x=aer**,
Each of
* I.e.
polistic
y^IjP
these
p=a-bx.
*
(2)
x = ----- 6,
pW^te.
(4)
*=
p=a-bx*.
(6)
x = bp-*+c,
p = oJlog-.
x
(8)
x^pe-*^+ c \
demand laws
satisfies
the
p~ x+bT
*
p+c
"
-c.
-,
normal
"
p=
-~
monotonic de-
imperfect
competition.
115
demand data
are available,
it
may
be possible to
fit
actual values to
a alone
If
If the
b.
>
24-
SUGAR
transposed parallel to
If b alone varies,
itself.
is
the line
rotated about
is
the point
on the price
and b
If both a
axis.
law
40
(x
+b)(
+c)
Mn.
a.
Ibs,
60
per month
100
FIG. 37.
positive quadrant.
hyperbola in the
when the
shifts in position
or
600
and
p+5
-20
~
600
or
- 5p=
'
x+2Q
The
last
9.8 below).
Ibs.
per
(see
In case
(4),
<x^
116
An
and
c are constants
description of
of the
demand
The demand
tions,
<f>(p)
situation,
and curves.
for a good X is represented by the two inverse funcand p = $ (x), of the demand law. When the demand
is
total
given demand
law.
Ox and a vertical axis OB.* The height of the total revenue curve
thus measures the total revenue obtainable from the output indicated.
The total revenue function, being obtained from a continuous
demand function, must itself be continuous. But it is not possible,
"
"
at this stage, to indicate the
form of the total revenue
normal
function consequent upon the assumption of a monotonic decreasing
demand function. It will be seen later that the form of the total
The
fact that
revenue curve
curve itself.
is
is (in
117
a very general
pa-
R=ax-bx*.
This expression can be written in the form
The
occurs where
first,
is
a
Total revenue
#=^T'
2fy
reaches a
maximum
value
46
at the output x
~a
and then
26
good. But the price can be read off the curve quite easily.
the point on the curve at output x OM, then
MP
P = x^O~M =8
,.
dieni
fnT>
f
If
is
'
gradient of the line joining the origin to the appropriate point on the
total revenue curve. Since price decreases as demand increases, the
line
OP
becomes
less
and
less steep as
we move
and curves.
The following assumptions are needed to obtain a simple expression of the problem of cost of production.
given firm produces a
with the aid of certain factors of production.
single uniform good
Some
118
it is
factors is known and fixed. The remaining factors are variable and
the conditions of their supply are assumed to be known. For
example, the factors may be obtainable at fixed market prices.
II~F(x)
the
The
to various alternative
employed fall, then the cost function is changed so that the cost of
any given output is less than before and the total cost curve shifts
to a new position below the old curve.
It should be noticed that the total cost function and curve are
"
"
minimal concepts. By varying the employment of the variable
output can be produced at various total costs of
which only the smallest is used to define the total cost function. In
diagrammatic terms, the ordinate of a point on the total cost curve
represents the least cost of producing the output concerned and the
same output could be produced at larger costs shown by points
vertically above the point taken on the curve. The positive quadrant
factors, a given
of the plane
points
119
in the area
the curve represent total costs too small for production of the outputs. The total cost curve is the lower boundary of the area representing possible cost situations. But, since we usually need consider
only the lowest cost of any output, we are interested in the cost curve
it.
put
is
The total
left to right.
Fig. 38
shows a
20
40
60
80
"
form appropriate to a hypothetical
normal
overhead costs are 250 per week and total
case of a sugar refinery
cost increases with output, reaching a value of 1250 per week when
"
120
(1)
II=ax+b.
(2)
II=ax 2 +bx+c.
(3)
Il-Jax+b+c.
(4)
n^ax*-bx 2 +cx+d.
(5)
IJ^ax
(6)
n^ax*
(7)
n^ae bx
(8)
II=x ae bx + c +d.
The parameters
^+d.
x+c
.
and d are
a, 6, c
is
x+c
+d.
In case
(2),
left
of the origin at
#=
Since
JLCL
the curve
n=->x*+5x + 200,
77 per week
where
is
example,
is
fixed if a, b
and
to
shifts
Changes in a and
6,
on the
TT
and using
we have
f
and average
f( x )= x
cost
x
axes Ox and
is
OTT in a plane.
The form of
this function is to
be
is
(2)
TT->OO as
if total
above, then
7T=ax +h
Here
For example,
121
c
-f-
i.e.
fall
The average
is
not
necessarily monotonic.
5.6 Other functions
all
other than that of the good concerned are fixed, the total demand
and the total supply of the good are defined, by addition over the
price
decreases.
* See
Marshall,
122
is
of country A (when
similar function and curve is
offer curve
demanded.
the good Y being offered and
defined for country
These curves differ from those previously defined in that they are
referred to axes along which amounts of two goods are measured.
9
The
of Y.
country B.
We assumed, in 5.5 above, that only a single good was produced
by the given firm. A first approach to a more general problem can
and Y under
be made by assuming that a firm produces two goods
and the
amount of
X that can be
produced jointly with a given amount y of Y, then x is a singlevalued, continuous and decreasing function of y. The two functions
resources.
relation
giving
y=f(%)
and
where/ and g are single-valued and decreasing functions to be interpreted in the way described. The relation, F(x, y) -0, can be called
the transformation function of the firm and it serves to show the
alternative productive possibilities of the given supplies of the
factors.
The corresponding transformation curve in the plane Oxy
123
is
"
cut
normal
"
rate as the
production of
formation curve
is
decreases at an increasing
The trans-
Fig. 39
shows a
STEEL
20
Grade
40
B,
60
FIG. 39.
"
a firm
made.
The analysis can be generalised to allow for the use of given resources in the production of different goods, not at the same time,
but in different periods of time. In the simplest problem, it is
assumed that a firm, with given technical conditions and given productive resources, can arrange production in two years in various
"
sometimes called a
production indifference curve ", a
in
terminology which is not to be recommended since the curve has little
common with the indifference curves described below. The term " transformation curve" is used (e.g.) by Hayek, Utility Analysis and Interest,
*
The curve
is
Eaonnmir* .Tmirnnl.
124
ways.
It
is
incomes next year. Then, for a given income of x this year, the
firm can determine the largest income y obtainable next year from
its resources.
Conversely, the largest present income (#) can be
if next year's income (y) is given. There is thus a transformation function relating incomes in the two years, a function very
similar to the transformation function described above and siibject,
"
"
The corresponding
normal
in the
case, to similar conditions.
transformation curve can be taken as downward sloping and concave
as the income desired this year increases, the income
to the origin
obtainable next year decreases continuously and at an ever increasing
found
rate.*
5.7 Indifference curves for consumers' goods.
two goods
and
"
"
scale of preferences ". His
tastes ", on
according to a definite
this assumption, are such that he can arrange all possible purchases
of the goods in ascending order of preference and, given any two
alternative sets of purchases, he can either tell which purchases are
preferable or say that they are indifferent to him.
easily given
first
in
diagrammatic terms.
and
which measure the respective amounts of
If
we
start
a
with
set
of
represented
purchases
by
purchased.
given
"
* This transformation curve is
incalled, by Professor Irving Fisher, the
vestment opportunity line ". See Fisher, The Theory of Interest (1930),
pp. 264 et seq.
ordinates
(x, y)
125
than, and those which are on a level of indifference with the basic
purchases (x y ). The third group of purchases is represented by
,
>
'
>
and
possible sets of purchases have been inthe final result is a whole system of indifference curves,
all
The
indifference,
indifference curves.
Each
now be taken
as continuous
and the
we add
map
there
is
126
in
forms.
observable facts.
Since the consumer's preferences for two goods are represented by
a system of curves, the analytical expression of the problem follows
from the considerations of 3.7 above. The indifference map has the
property that one and only one curve of the system passes through
each point of the positive quadrant of the plane Oxy. The complete
map corresponds, therefore, to a functional relation between x and y
involving one parameter a which can be separated off as
the general expression
shown
in
</>(x, y)=a.
Here <f>(x, y) is a continuous expression in the amounts x and y of
the two goods purchased by the consumer. The variables x and y,
and the parameter a, take only positive values. If the value of a is
fixed,
we
system.
changed.
The parameter a
level of preference
two goods
it is
concept of preference or
"
utility ".
127
The
sumers' goods
(I)
(2)
-\-h
=a,
where
0<x<a(A - Jk) - h.
(x+h)(y +k)^a,
where
h - vy
+k
(3)
Here a
x+y + \/'2xy
~-
a,
where
<# <;#.
"
"
To allow for
is an essential part of the description.
in
the
must
tastes
we
the
form of the
consumer's
changes
modify
whole indifference map. It is the function <f>(x, y) which reflects the
The parameter a
is
indifference
map
A system of indifference
* It is
k,
when we wish
demand
128
We
and that
his
made
in either year.
We
can
On
axes along which we measure the amounts of this year's income (x)
and of next year's income (y) One income grouping (so much this
year and so much next year) can be compared with another grouping
t
where
t/t(x,
y) is
income over time and they are similar to the limitations imposed
problem of purchases of goods made at one time.
Further properties of the indifference map for incomes can also be
assumed in " normal " cases. If neither income is large, the indifferfor
in the previous
129
an income
indifference
is
map.
The
analytical expression
is
_,
h-*Jy+k
is
modified.
EXAMPLES V
Economic functions and curves
1.
The
price of a certain
demand
is
it is
found
Represent these demands graphically and show that the demand law is
approximately of the linear form x = 120 - 2p. Then graph the total revenue
curve and find the largest revenue obtainable.
2. A cheap gramophone sells at
p and
x hundred machines per year, is given by
it is
known
Plot a graph of the demand curve. At what price does the demand tend to
vanish? Draw a graph of the total revenue curve and determine at what
price and output the total revenue is greatest.
3. A firm selling toothpaste investigates the form of the demand for its
product by fixing different prices in four successive periods. It is found that
the necessary outputs are
M.A.
130
Choosing suitable scales, plot the total revenue for these outputs graphically.
Show that total revenue can be taken approximately as a linear function of
output.
4.
What
whore a and c are positive constants? Show that there is some demand 110
matter how largo tho price. Is there any limit to the oxtent of the demand
Show that total revenue falls steadily as output rises and
for small prices?
compare with the case of the previous example.
5.
prices ?
7.
Of what type
is
the
a
positive constants?
If
is
demand curve p
8.
at
shillings
per week.
It is
known
that
p = "s/225 - 9#,
the number of tenements let per week. Graph this demand law.
kind of law you would expect hero ?
9. Find x as a function of p from the demand law p = Va - bx. Show that
tho demand curve is an arc of a parabola with its axis parallel to Ox. Locate
the vertex and indicate tho shape of tho curve.
where x
is
Is it tho
10.
The number
Southend
is
(x)
that the demand curve is a parabola and locate its vertex. Also graph
the total revenue curve, showing that revenue rises rapidly to a maximum
Generalise by considering the demand law
before falling off slowly.
p = (a - foe) 2 , whore a and 6 are positive constants.
Show
the
demand law
Draw
is
the demand curve, show that it is a parabola and locate the vertex.
Also draw the total revenue curve and find at what fare the revenue is greatest.
At a
demand curves in
be x =
known
is
it
6,
131
this
that the
is
"
constant " costs 11= ax + 6, show that the average cost
13. In the case of
curve is a rectangular hyperbola, average cost falling continuously towards
the value a as output increases. yV. builder of small bungalows has fixed
"
overheads " of 5000 per year and other costs are always 300 per bungalow.
Graph the curve showing average cost per bungalow when a variable number
is
14.
2
out per week, the total variable cost is
(3.c + 2V# )'
variable cost increases steadily with output.
if
a;
sets are
Show
turned
that average
15. If the overheads of tho plant of the previous example are 100 per week,
find the average cost in terms of the output and draw the average cost curve.
What is the least value of average cost ?
16. A coal retailer buys coal at a list price of 40 shillings per ton. He is
allowed a discount per ton directly proportional to the monthly purchase, the
discount being 1 shilling per ton when he takes 100 tons per month. His overheads are 50 per month. Obtain total and average cost as functions of his
monthly purchase (x tons) and draw the corresponding curves for purchases
up to 1000 tons per month.
17.
The
electricity
at a total cost of (2\/40:e - 175 + 90) per day. Draw the total cost curve.
Express the average cost, in pence per unit, as a function of x, draw the
average cost curve and show that, as output increases above a certain
minimum, average cost decreases rapidly.
18. Tho total variable cost of a monthly output of # tons by a firm producing
a valuable metal is (-&B S - 3# 2 + 50#) and tho fixed cost is 300 per month.
Draw tho average cost curve when cost includes (a) variable costs only, and
Find the output for minimum average cost in each case. Show
(6) all costs.
that the output giving least average variable cost is less than that giving least
average (fixed and variable) cost.
Show
20.
x (x + 200)
4(a; + 100)'
and average cost curves and show that average cost decreases
continuously from 10s. per Ib. towards a lower limit of 5s. per Ib.
Graph the
total
132
rr
X+b
ax -X+C
total cost as
where a, b and c arc positive constants (6 >c). Show that total cost increases,
and average cost decreases, as output increases. Of what type is the average
cost curve ?
22. If the tobacco manufacturer produces at a total cost of
his output is x tons per day, draw the graphs of the total and average
cost curves. Describe the way in which total cost increases with output and
find the output at which average cost is least.
Generalise to show that the total cost function
when
Ilax --- +d
x c
2
gives total
23. On the market of a country town, butter is brought for sale from the
surrounding district weekly. It is found that the weekly supply (x Ibs.)
depends on the price (pd. per Ib.) according to
a = 100\/p~r 12 +
150.
From a graph
is
linen.
Tho amount of
cloth
(y million
(x
~~
2400
The amount of
linen offered
by Germany
for a given
amount of
cloth
is
~
10
thousand
Ibs.
per year
ditions graphically.
is
* <60)
the output of the other line. Represent the conkind of curve is this transformation curve ?
What
man derives &x from his business this year and y next year.
26,
alternative uses of his resources, he can vary x and y according to
If he
wants
By
133
x2
this year?
"
normal " case in this
represents a
are such that b>a. What is the transformation curve?
27. If a coal
shift,
is
F2/
25
tons of coal. Draw a graph to show the way in which output varies with tho
number of men and find the size of the shift for maximum output. Express
the average product per man as a function of x, draw tho corresponding curve
and show that it is a parabola. When is average product greatest?
28.
#-H4
_d
a.
2, 3, 4, 5,
map
CHAPTER VI
DERIVATIVES AND THEIR INTERPRETATION
6.1 Introduction.
HAVING made
ideas of
we
"
when x changes .^
In the differential calculus, we make precise what we mean by the
rate of increase or decrease of a function, we set out a method of
derived, of measuring the rate at which y changes
we
systematise the
the
"
consideration
systematic
of the
rates
of increase
of
functions ".
and measuring
it is
proposed
first
rates of change
135
3
3 corresponding increase in the function is (# 2
a^ ). The average rate
of increase of the function per unit increase in # is then
/y
l>
_ "^
/y
x.
As x is
an
amount
by
which
the point x
is
Lim
"
that a function
it
is
136
it
at the point x.
3
So, the rate of increase of x at the point x = 1 is 3,
2 it is 12, and so on.
In the first case, the value
at the point #
of x 3 is tending to increase at the rate of 3 units per unit of x and
3
similarly for the other cases. The rate of increase of a: at the point
As a second example,
by an amount
(x
+ h).
--I
(I
I
\x
x+hJ
The average
it is
_._
The instantaneous
thus
x(x+h)
M!
1/1----
h -+o
is
__
x+hJ
T im
Lim
r
The function -
X
an
h
from x to
amount
by
J
as x increases
h \x
* \x
%+h'
is
x2
~
by the expression x
The process described above can be extended and generalised to
apply to any single-valued function whatever. Suppose the independent variable of the function y=f(x) changes in value by an
amount h from x to (x +h). We can regard h as taking positive or
negative values, a positive value indicating that x has increased and
a negative value that x has decreased. The corresponding change
in the value of the function is then of amount {f(x +&) -/(#)} and
values, the rate being always given
f(x+h)-f(z)
'
then indicates the average rate of change in f(x) per unit change in x.
The sign of this expression is important. If the sign is positive, then
f(x) changes in the same sense as x itself, increasing as x increases and
decreasing as x decreases. If the sign is negative, then f(x) changes
in the opposite sense to x, increasing when x decreases and decreasing
when x increases.^The important question is whether the average
any
h gets
137
"
incrementary ratio
"
On
x 3 increases as x increases.
1 /
T
Lun
1\
Except
T
7--xl -Lim^
h_ Q [
A-X) h\x+h
.
is
}
r\r= ~
1
*
x*
x(x +A)J
identical with the rate of decrease we
x2
6.2
The
If y
if
definition of
/(#)
is
a derivative.
ratio has
no
the point
x.
If the incrementary
limiting value, then the function has no derivative at
by the
number of
138
and they
d
or as
The
y'
=/'(*)
DEFINITION
The
to the variable
x at the point x
is
h
if
on the
a number of observations
is
postponed.
(2) The incrementary Tatio used in the definition is not defined
when h is actually zero in this case it assumes the meaningless form
of zero divided by zero. Thus the derivative cannot be regarded as
the ratio formed by putting A~0 in the incrementary ratio. The
;
ratio.
is
In the notation
ax
or
-7- fix),
ax
the
-;-
ax
must be regarded
as
an
the derivative
(3)
is
The incrementary
"
to zero.
finite
values and,
Ay
if
a value
139
Ax
is
tends
allotted
is
itself.
of y per unit of
equals
/*,
new
units,
The
is
^A
times
measurement of
x.
a function of x.
the derivative
may
There
be obtained as
possible values of x.
(6) It must not be
exists at
any
point.
we have determined
point in question.
"
derived function
we
"
can be
all
the various
fact,
140
form
is
So, -r-(#
3
)
CvX
and -
when we wish
respectively.
The
and
x0
and x
denote the derivatives off(x) at the particular points
More generally, the derivative off(x) at x = a is
respectively.
it is
and
[^3)1
Ldx^ "J^j
[(*)
'
Lefar
0,
and
x~ a respectively.
how
convenient
it is
to
makes
it
any progress
is
possible.
The
considerations of 6.1
-=~-
ax
\x
*jX
show that
and
-=
ax \x/
x2
The
1.
limit as
141
obtained as the
is
__
~~
= 2.
~(2x-l)
dor
So
The
d
(ax+b)-=a.
ax
.
-j-
Ex.
The incrementary
2.
2
(a;
+ 3x - 2)
is
l[{x+h)* + 3(x+h)-2}-(x*+3x-2)]
2hx+3h+hz
A->0.
as
So
t(
Ex.
(ax
3.
{2(x +h)
+1
l
+bx+c) =2ax+b.
2x +
--
2x +
is
1
,
is
JL
1]
= (a?
1)
(2x
x-l)
+ 2h + 1) -
(2x
+ 1) (x +h -
1)
h(x-l)(x-
-3
__ _
So
(a;-!)
The
to 1
If
x = 1 the
,
142
6.4 Derivatives
The
Hence
x.
ment
is
changed, so
is
Ax
is
in the value of x,
and
if
Ay
is
the corre-
sponding small increment in the value of yf(x), then the derivais the limiting and approximate value of the quotient of
tive f'(x)
Ay
Hence
divided by Ax.
r {/(a
4-A)
-/()}
x=a
for
is
a small value of
h, i.e.
fi
14^
The value of x
is erroneously taken as d
"
instead of the correct value (a +A), where h is a small
error ".
"
"
The above result shows that the error in the value of the function,
resulting
of the radius,
-7- (f 7r#
3
)
= 4?r^ 2
For example,
/(*)=
then
2x+l
r
/(3)=|
So
and
tl
if
/(*)=-(ar-ir
and /'(3)=-|.
=f+(*-3)(-f),
-approximately when
(x
3) is small.
In general, therefore,
it is
possible to represent
6.5 Derivatives
One
und Rente
(1893, reprinted
144
on a curve
either
or
is
Q is varied.
Suppose that
and
is
its
fixed
position varies as
along the curve and approaches P from one side or the other. It is
clear that it is usually, but not always, the case that the chord PQ
tends to take up a definite limiting position PT as Q approaches P.
Fig. 40 illustrates a case where this happens. It is possible, however,
X
FIG. 40.
PT
PT of the
P.
If
chord
exists,
then
no limiting position
it is
exists,
at P.
The instantaneous
any
point,
the
i.e.
is
This gradient varies as the tangent varies from point to point on the
curve and is always given as the limiting value of the gradient of any
chord PQ as Q approaches P.
Our
discussion
is
by
The
145
So
Gradient of
at
approaches P,
Gradient of tangent at
i.e.
P^Lim
(if it
exists) of
Hence
as A->0.
^ x + ^ ~^X- -=f'(x).
a curve
is
The tangent
to the curve
gradient =f'(x).
From
y-y =m(x-x
1
This line
is
the tangent at
l ).
2x,
i.e.
with abscissa
So
yt ) on
co-ordinates
T- (x
CLX
(xly
yx
as an example,
x.
(xl9
The tangent
the abscissa xl
/(xj).
i.e.
yt )
is
2x at the point
is
i.e.
i.e.
yx
2
on the parabola
the tangent
at the point has gradient 2 and the equation of the tangent is
y - 2x +1 =0. The tangent gradient and equation at any point on
lies
M.A.
146
The diagrammatic
is
gradient
later
when
it
can
derive,
is
X
FIG. 41.
in Fig. 41.
rate as
The
first
increases.
the point
Ax=LMPN.
Ay=MQ - LP=NQ.
NT
,
147
i.e.
f(x)Ax=NT.
approaches P.
It is obvious that there
some
relation
curve
continuous
can be
y\
a curve which
smooth
sense
the
of
"
in the ordinary
term. All
this
1-
ordinary functions of
(except
very
they
special
are
perhaps
points)
represented
at
and
FIG. 43.
by
demand or
Further,
cost function,
when we introduce a
it is
as
"
exists,
we say
"
with abscissa x and the gradient of the tangent is infinite, i.e. the
tangent is parallel to Oy. The case is illustrated by the curve
y l + Ux - 1, shown in Fig. 43, which has a vertical tangent at the
148
hyperbola of Fig. 33
derivative --
its
is
a case in point.
(x
are infinite at
many
cases, that
The rectangular
2x
-fl
X~
-~
and
x = l.
off
1)
"
"
at infinity ",
to infinity
at this point and has a vertical tangent
i.e. the asymptote x
1.
To deal with many infinite discontinuities,
therefore,
we have only
function and
6.6
its
The
is
also a function of x.
is
possible, therefore, to
We
i.e.
again a function of x.
can thus proceed to find the derivative of the second derivative,
the third derivative of the original function. In the same way,
is
in
Extending the notations already adopted for the dea given function
yf(x) can
dy
~
or y,
t/',
be written
d*y
d*y
t,",
</",
...
d^
d_
f(x),
/"(*),
/'(*),
d^
/'"(a), ....
main
* It often
happens, of course, that the derivatives beyond a certain stage
2
This is not the same thing
zero, as in the case of the function y =aj
as saying the derivatives do not exist.
become
149
The
the value of x z
is
second derivative.
move
by means of the
defined
somewhat
6.7
The
nection between quantities by means of a functional and mathematical relation between variable numbers, we find that our main
is with the average rates of change of these functions.
These remarks apply even if discontinuous variables and functions
are used to represent the necessarily discontinuous quantities of
concern
150
less elegant:
We
The
phenomena under
consideration.
Any
relation
when
distance function.
we
seen
"
natural
"
concepts
limiting values.
When we say
* For
example, if x is the distance travelled in time t, then x at represents
motion at a uniform speed and xat 2 motion at a uniform acceleration, a
being a constant in each case.
151
that a train
is
We
minute or even 88
next second.
average speed.
The second derivative of distance travelled as a function of time
is
first
derivative
commonly
The
is
again a limiting
changing. Accelerais
be a
difficulty.
The
specified.
per second (30 m.p.h.) and that its acceleration is 2 feet per second
per second at a given moment. This means that the train is tending
to cover distance at a rate proportional to 44 feet in one second and
tending to increase at a rate equivalent to 2 additional feet per second in a second. In the same way, when we say
that the constant acceleration of a body moving under gravity is
that
its
velocity
is
152
clear.
is
(e.g.)
of the
hour's run.
Some
We
* See
Haldane,
(1932),
Appendix.
153
But the price p can be regarded as the average revenue obtained from
the demand x, i.e. total revenue divided by the amount demanded
or produced. The ordinary demand function and curve are thus
equivalent to the average revenue function and curve. Total revenue
Rxift(x) is also a continuous function of demand. From the total
revenue curve, we read off average revenue (or price) as the gradient
to the appropriate point P on the curve.
of the line OP joining
If output is increased by a small amount Ax from a certain level x,
suppose that total revenue is found to change by an amount AR.
There is an increase or a decrease in revenue according to the sign
of AR. The added revenue per unit of added output is then the
"
"
ratio of AR to Ax, i.e. the
for outputs from
average revenue
x to x -f Ax. As the output change becomes smaller, we obtain the
rate of change of revenue on the margin of the output x as the limit
An
of
-p
and
as Ax->0.
it is
This
is
dx
= -^-{xibtx)}.
T
dx
the total revenue curve, the form of the marginal revenue curve can
be deduced at once from that of the total revenue curve.
* The term "
marginal "increment of revenue ", which is sometimes used, is
not to be confused with marginal revenue ". The former is the increment
AR in revenue resulting from any increase Ax in output from the level x. Now
Tr>
AR =
dx
Ax approximately when Ax
is
small.
of revenue for a small increase in output is approximately equal to the marginal revenue times the increment in output.
154
Two
pa-bx
R=ax-bx
The
and
~j-=a-2bx
dx
(see 6.3,
Ex.
2).
demand law
Here, as in
all cases, it is
SUGAR
25
Mn.
50
Ibs.
75
M.RN
per month
FIG. 44.
the average revenue (or demand) curve on the same graph, and
same axes and scales, as the marginal revenue curve.
referred to the
is
greatest.
zero gradient.
From
the
En
demand law p
ax
x +6
- c, we derive
dB
ab
falls
and
600
s?L-5 (see 5.3 above).
-{-20
155
The
a very similar way. The total and average cost functions and
curves have been sufficiently described already, average cost being
read off the total cost curve as the gradient of the line OP joining
to the point
curve.
SUGAR
50
25
Mn.
Ibs.
75
per month
FIG. 45.
If output
is
increased
by an amount Ax from a
is
~j
is
certain level x
and
if
value of this ratio as Ax gets smaller, i.e. marginal cost is the derivative of the total cost function IJ=F(x).
It measures the rate of
and approximates to the cost of a small addiunit of output from the given level. Further, the marginal
cost of
Average cost
The
TT
= ax -f b -h - and
x
Marginal cost -=
ax
The average
= 2ax + b.
Marginal cost
by some
writers.
is
is
cost curve is
with axis
found to be
156
upwards with gradient 2a. The three curves are shown in Fig. 46 in
the particular case where /7=T^c 2 +5x +200 is the cost relation for
a sugar refinery
OM
through the
At such an
origin.
is
smallest
and
25
50
25
7*0/75
50
Tons per weeh
per week
FIG. 46.
co-ordinates of
OP
produced.
at
(referred to Ox),
and
its
X
Y
of Y is increased when the production of X is decreased.
of
In the same
157
EXAMPLES VI
Evaluation and interpretation of derivatives *
1. Find,
x 2 and
(I
+x)
z
.
2.
of x
from the
Show
is
change.
3. Use the definition of the derivative to establish the general result that
the derivative of (ax z + bx + c) is (2ax + b).
Evaluate
4.
ax
(x(l +x)}
and
from the
-j-{x(l -x)}
ax
Show
definition.
that
these derivatives are respectively the sum and the difference of the derivatives
of a; and x 2
Does this suggest a general rule?
.
From
5.
2a?
+-i
x-
-r-
r^
dx \a 2x + 6 2 /
= -^
(a 2x
and hence
T^T;2
+ 62
7.
What percentage
--
2x + 1
r- as x increases from 2 to each
Find the average rate of decrease of
x 1
of the values 3, 2-5, 2*1, 2-05 and 2-01. Find, from the derivative, the instantaneous rate of decrease at x = 2 and compare with each of the average
8.
rates.
9.
=i(o?
la;-
+ 1) approximately when x
10. If
is
derivative of
small,
+x
show that
Show
that
nearly equal to
= 3 - 2x and
1.
+ xf'(Q) approximately.
this expression
Find the
What percentage
approximations when x = 1 1 ?
is
f(x) =/(0)
when x
and
* Further
examples on the interpretation of derivatives are given
Examples VII, 24-37 below.
in
158
11.
x2
+xf'(a) approximately
when x
is
small.
From
show that
and
<!+*)' .= 1+3*
approximately when x is small.
out as a cubic expression in x.
Check the
How good
first result
is
by multiplying (1 +#)
the second approximation when
a=0-5?
z
12. Use the derivative of x to show that the approximate increase in the
area of a circle is 2nah square inches when the radius is increased by a small
amount h from the value a. Calculate the actual increase in area when the
radius increases from 10 to 10-1 inches and compare with the approximate
value given by the above formula.
13.
circular ink-blot
7rr
The
14.
V =f 77T 3
-f-
What
18.
(#i
is
19.
xy
2/i)
Show
(1,
)+2c.
1) on the rectangular hyperbola
l
20. Show that xy l + yx l =2<x.* is the tangent at the point P(x lt yj on the
2
and B and
If the tangent cuts the axes in
rectangular hyperbola xy = a
bisects OA
if
and
are perpendicular to the axes, show that
and
bisects OB. Show also that the area of the triangle OAB is a constant
on the curve.
independent of the position of
PM
N
PN
21.
From
the derivative of
JL
point (x l9 2/ x ) on the rectangular hyperbola (x l)(y -2) =3. Show that the
tangent gradient tends to become infinite as x l -+l. What is the relation of
this fact to the vertical asymptote of the curve ?
159
any timo-
lead pellet falls at* feet in t seconds. What is the average speed between
the jth and the 2 th seconds? Find the velocity after t seconds. How good
an approximation is the velocity after 3 seconds to the average speed between
times t ~3 and t 3-5 seconds?
Show that the acceleration of the lead pellet of the previous example
constant over time.
23.
is
24. What is the derivative of ( 1 4- 2#) ? Show that the electric current in a
wire is constant if (1 4- 2) units of electricity pass a point hi the wire in t
seconds.
25. Draw the total revenue curve on one graph and the demand and
marginal revenue curves on another graph in the case of the demand for
gramophones of Example V, 2. Verify that the marginal revenue is zero at
the output giving greatest total revenue.
26. If the market demand for tea is given by the law of Examples V, 1,
total revenue curve and read off the tangent gradient to give the
draw the
marginal revenue at demands of 50, 60 and 70 thousand Ibs. per week. Check
these values from the expression for marginal revenue. Draw on one graph
the demand arid marginal revoiiue lines. At what price does marginal revenue
vanish ?
27. Evaluate the derivative of (ax + bx*). If WOx passengers travel on tho
train of Examples V, 1 1 find an expression for the marginal revenue derived
,
by tho railway company. Draw the marginal revenue curve, showing that it
is a part of a parabola falling to the right.
Find the fare at which marginal
revenue is zero and verify that this fare produces the greatest total revenue.
A firm produces
Draw two
15.
is
30.
From
31.
the derivative of (ax 3 +bx z + cx), find tho marginal cost of any
in
the
case of the firm of Examples V, 18. Show that the marginal cost
output
curve is a parabola and locate tho output for least marginal cost. Draw the
average and marginal cost curves on one graph and show that the output for
least average cost is greater than the output for least marginal cost.
this year
and
~
Kdy\ -
cost.
Show
income
is
#.
= 1000 -^^
Explain
1 >
is
when
this year's
CHAPTER
VII
THE
this stage,
of derivatives
not an end in
We
itself.
same kind of
We
tific
study.
steps.
The
forms ", being set out in tabular form and memorised. The table
of standard forms, once obtained, is taken for granted and the
derivatives it contains simply quoted whenever they are required.
All the functions considered in the present chapter are actually
"
"
derivable from one simple function, the
power function. Our
Many
It will then
be necessary
The second
derivation of
step
is
new
by evaluating the
derivatives
functions.
more complicated
161
functions.
derivatives. The combinations may involve sums, differences, products or quotients. But, as we shall see, they may also include a
very different kind of configuration. In all cases, the rules for deriva-
With the
and
number
varies,
n.
2
Ja, a~
and aT%
-$-=2
va
a n is to
be interpreted as follows
In general terms, the power
n denotes the result of
a
n
is
a
If
(1)
positive integer,
multiplying
a by itself n times.
(2) If
is
of a certain root
(3) If
is
aq
'(/a
r
.
power
1
--
va r
1.
a n stands for unity a
n
is an irrational number, the power a is more complicated
(5)
in meaning. We can write n, in this case, as the limit of a sequence
The power a n is then
of integral or fractional numbers n l9 n z n s ...
defined as the limit of a n r as r~>oo
"
In all cases, the power a n obeys the familiar "index laws developed
n
If n
(4) If
is zero,
in elementary algebra.
L
M.A.
162
One of the
is
continuously from the whole set of numbers except that only positive
disvalues can be considered in certain cases (such as y Jx).
and
its
power function is
same type. For example, the power funcx 2 gives the inverse function x = Jy, which is a power function
tion y
of
y.
The
derivative of x n , for
any value of
standard form.
n, is
now
required as a
can be taken
first
d i \ Th
(x+h)-x =Lim
T
*
= 1,
T-(*)=:Lim
ax
(
T
/O
i\
O
=Lim
(2x+h)~2x,
(x
-7--J=
i/
d
_.
r -(-J=Lun rl
h \x
dx \a;/
-
^Q
i\
+h
xl
T
Lim
.
A_>
--
rr= --5,
x2
x(x +h)
.e.
"
.e.
uniform law
derivative of x n
is
is
now
163
n whatever and,
to provide a general
proof, we need a result which will be established at a later stage (see
17.3, Ex. 1, below). The result can be expressed quite simply
:
where A
mu
Then
is
T~(^ X
--
n
n
(X+k) -X ^Lnn
TT
=Lim
X n f/
-r- 1
h -+Q
# n (- +A 2
X /
\X
n
)
=nx n ~ l
for
xn
h [\
h _+
=Lim
is finite
even when
n
+-k\ 1
xJ
^}
1
-~
X
any
fixed value of n.
we
d fl
-
/Y/*
j**/
'
/>4
iC
U'^x
d_
ax
,//>.
Many
fJL^
V
/
//>.
\jjc/
_t
= A(Z-t) = _!-*=
O
ax V
/7/y.
&
_2_
L=.
'
/-
i^
We
come now
sums
164
RULE
The
I.
derivative of
a sum^df difference.
is
the
dx
RULE
II.
The
ax
dx
dx
derivative of
dx
dx
a product.
The
dv
du
RULE
III.
The derivative of a quotient.
derivative of the quotient of two functions is equal to the
denominator times the derivative of the numerator minus the
The
all
divided by
A
a
As
d
- - fl\
dx \uJ
special case
~ - - Idu
- -~
u 2 dx
defini-
d.
-r~(u
_.
+v)=Lim
A->0
_du dv
~dx dx'
We
and
165
change in value as x
rate of change,
II
now
varies.
a constant
the derivative of
i.e.
Rules I and
is zero.
give
du
-rdx
d
-r (u +0)
dx
.
where u
is
d
-=- (au)
dx
is
du
dx
and
The
three rules are set out above for the case of a combination of
sum and
"
example,
r
777
\_^u
aw
dx
dx
dx
dx
where
u, v
and
'
known
derivatives.
The
d
dx
dw
d
~j-
dx
dx
(UV)
dw
= UV-^- +W
dx
\U
\
dv
dx
+V
du\
I
ax/
du
dv
dw
vw ^- +uw -^- +uv -=
dx
dx
dx
In an exactly similar way, we can show that
d fuv\
I
dx\wJ
du
w*\[vw dx
dv
dw\
+uw~r -uv-j-]
dx
dxJ
different
166
two
functions.
y~uv
The product
dy _
y=uv and
du
Idv
vdx
udx
ydx
written
ni
dy __
du
y=-
can be arranged
Idv
vdx
ydx~udx
y=uvw obtained above
1 dy
_ I du Idv I dw
ydx~udx vdx wdx
becomes
w
dy __
becomes
1
du
ydx~udx
Idv
vdx
dw
wdx
We now
derivatives.
illustrate the
way
in
The
by
same rule or of different rules. The method of dealing with constants
in the derivation process is particularly to be noticed. It is also
clear that some derivatives can be obtained in two or more different
ways.
it
in
Ex.1.
(5x)=5-j-(x)
2
Z.
d
j~\~~/""J~\
ax \x/
ax \x
Ex.
3.
Ex.4.
= 5.
-(
all
that matters
is
to get
167
(-
Ex.5.
Ex.6.
Ex.
7.
(ax
+ 6) =a
3
-y- (ao;
-f
bx2
cte
Ex.
+a;
8.
jj-{x(l
-^~
(ax
a, 6, c,
+ bx+c) = 2ax + b
+a;2 )
+ (l
we have
)}=a:~(l
...
so on.
+x*)^(x)=x(2x) +(1
= l+3a;2
2
^{a;(l +a: )}
Ex.9.
^-(l+a;)
ax
or
=A
=^(
ax
ax
Ex.
10.
^{a:(l+a:)(l-f2a:)}=a:(l4-a;)^(l+2a;)
+ (l+2a;)
+60;
Ex.11,
jfc
9 "*2
Ex.12,
or
"f
-1
1\
d /2xz + l\ d /
2* + - 1=2
a;/
<ic\
dx\ x /)=-r
j-(
2xa -
;=
a;
a;
+ 6a;2
168
=
" (l-2s)+2(l+s)
2
(l-2a;)
(l-2a;)
Ex.
~( {f ^ A
14.
//>
UtJU
Ju
^I t
'V
I */
I.
~r
1
I I
J I
ic
Ex.
ax
-=-[
X
d_ (f(x)\
+ 6) - x "
~
ab
__
~
dx f(x) f(x) dx (x) _af'(x)-f(x)
dx\~ x f
7.5
(x
16.
where /(^)
-c-f-(x)
__
Ex.
d
dx
f
(
1
/
dx\x + b/
dx\x+br-cx)=a^-\
15.
is
x*
The three
'
x*
rules
the derivation of
rule.
we have
all
"
"
which
is
functions.
mixture
The
function which
mixture
is
", in fact, is
fundamentally
not as before.
different in nature
We have a
and we need
is
a function of x and
du
its
derivative
/f^
169
is
srs <*'-s)=te.
The
original function
of the variable
it
can be described as a
"
function y N/2# 2 -3
function of a function of x ".
It
is
RULE
IV.
If y
a function of u where u
is
The
derivative of
a function of a function.
is a function ofx, then the derivative
dy ~~ dy du
dx du dx
rule proceeds
dx
Let
So
h-+Q
k = <>x + h)-<>x)->0, as
dx
h ^Q
T
= L/im
.
-- - h
f(u + k)-f(u)
j
*
.L/im
A-*O
<f>(x
+ h)-<j>(x)
7
du
-7du dx
= dy
-7
We use here the result (see 4.5 above) that the limit of a product is
the product of the separate limits.
The rule clearly extends to the case where there are several " inter-
170
if
is
is
a function of u where u
a function of x, then
dy _ dy du dv
dx du dv dx
This follows from two successive applications of the simple function
of a function rule given above.
The
and so
Since
is
dx
is
Ex.2.
i.e.
y = (l+x)
y u* where u = 1 + x.
2
.(.
So
i.e.
2/=- where M =
S
which has also been obtained before.
Ex.4,
i.e.
y=un
(ax
where
u=ax + b.
b)=~
fT+x
1.
y = V^ where w =
I
i.e.
(7.4,
Ex.
9)
by other methods.
^.jM=;__ = _y
NOW
Tk.T
/J-
~2X
__
and
So
-J.(^.) =7
A /LE-i
A -2s
(7.4,
171
Ex.
13).
33
(1^2^~2
5i V"fT2S~2 V~l~+^
d , n\
--( u '
dx
.
where u
is
nun-l
,
du
dx
which
is
From
1,
we have
'
7.6
case
rule.
we can
derive the
fifth,
and
RULE
The
dx_l_
dy~~dy'
dx
provided that both functions are single-valued.
The proof
y=
{>
j (x)
<l*{<f>(x)}
But
is
as follows.
=
gives the single- valued inverse function x *fj(y).
x.
value
of
So
must equal x for any
W(*)>=*(y)
dx dy
dy dx
*(*)
Then
172
As an
and
is
-j-
>Jx.
If y = Jx, then
is
proved.
This result agrees, of course, with that obtained from the standard
form giving the derivative of x n for any value of n.
all
single-
how
new
forms
7.7
function types, as
the derivative.
will
be given
later.
derivatives.
The
The
and higher
same way.
third, fourth
succession in the
d*^
rv
_d
~~
'~dx\
dx
__
""
Idu
dx \dx
d fdu\
dx \dxl
dv\
dx)
d fdv\
dx \dxl
2
_d u
~
2
dx
a positive integer,
is
d u
rule
d'v
more
is
dx
dx
Prom
difficult.
du
dx
dv
173
d2
d I du
d ( dv\
-^(uv) =T- (u-^ }+ -T- \v
.
we have
2
dudv\
d*u
fdudv
~ / U d v *~~
+ V~
+
~
d v
-2
dudv
d 2u
----I-T;
-
dx*
The
third derivative
is
du d 2 v
_d
r
'
v
nii%j \
ni
'
This
is
known
A*
r ~l
__
2
as Leibnitz's
obtained, in
__ _ ___
rfr-
'~ 1+
'
_ __
r(r-l)d
v
is
__
r
v
dud
- d__
+
'~
of the product
r- z
dx
ud 2v
r~2
dx
(_
___
d r ~ l u dv
dx r ~ l dx
'- z
|_
7;
d ru
_
dx r
coefficients of
the
Ex.l.
(#)
=4*';
J^)
174
Ex.2.
Ex.3.
oar*
(#
n
)
so on.
The general result for the rth derivative of this standard form can be
written down by inspection
:
n
T~r (x =n(n 1) (n -2)
)
...
(n-r + l)x
n ~r
.
zero derivatives.
Ex4
.--
18
dx\3x+2
d*
Ex.5,
2* - 3
and
Ex.
6.
If f(x) denotes
{*/(*)}
and
{xf(x ) }
any
=*/+/(*),
=
then
and
{~?}
'
^ \f i&xf
i
f
r
(x}
" /^
-l-
f ^^
/i-l
^a/^ -t-y
EXAMPLES
- {xfl (x) ~
f(x)}
f(x)}
JL
9T/W ^.c^
f ^^j
rH
f
175
^*c^c/
f i-t
*Z)
j/Vi-Hl
\JC)j}
VII
Practical derivation
1.
Write down, from the standard form, the derivatives of Va?, -- and
x
2.
Obtain
the
l+2ce a -3:e 4
of
derivatives
l-x*
3. If 0, 6
and
4.
Show
(x -2)(2a;
1)
(a;
l-
+ 2)(a;4-3)
d /
&n
""
2
4- 6)
+
da; \aa; a
2ax+b
+
+ c) 2
2
+ 60? + c/
(aa;
fea;
that
5. If /(a;)
6.
a
(ax
show that
c are constants,
d / 1 \_
""
da; \aa;
di
\aa;+6/
+ bJ
(l-x)
=az+b,
Verify that
+a;+a;
n
4- a;
+ ...
"
a/
^
-
deduce that
and
a;/ (a;)
~x
By means
xn
(1
x)
of derivatives,
nxn
x
2
Find y as a function of x.
7. It is given that y = 1 +w* where w = 1 -a;
Write down the derivatives of y with respect to u and of y and u with respect
= -~ -=to a;. Verify that
.
da;
dw
da;
8.
...
Jx
9.
4- 1
and
v a; +
- vx -
and
Deduce the
last derivative
rule.
176
10.
From
Multiply out these powers and deduce the derivatives by using the sum, product and quotient rules only.
11.
a*+te+c'
12. If f(x)
and
its
13. If
x and y
*?=_
ax
and
*?=_*,
y
dy
d
/
dy\
a single-valued function of x, show that -r- (x 2 -f y 2 = 2 x + y -fx
dy
Deduce
Deduce that -~ = - - if x and y satisfy the relation x 2 + y 2 = 1
Verify by
dx
y
14. If y
is
and
Find the
first
ax + b
and of
foTxy=a+bx.
18. If y
x2
x*
hold for the relation
16.
--
#-~ + 2 dy =0.
d^ii
dx
y =ax* +
Show
dx
ax + 6
Deduce
by a constant
factor.
~ - 4w =0.
dx
result
ft
2
19. Show that all derivatives of ax
are zero.
+bx+cof higher
177
Write x
derivative of x
function rule to obtain the derivatives of *Jx and tyx. Find the derivatives
of x* and x" a by the function of a function rule from the derivative of *Jx.
23. Generalise the results of the previous
form
dx (x
~
nxn l can be deduced, for
n
)
any
rational value of n,
(x)
u.'X
77-
25. If water
is
one cubic inch per second, show that the depth increases by
per second when the depth is x inches.
r-r
7rX
'
inches
'
26. Find the equation of tho tangent to the curve y = ax f 6 + ~ at the point
x
with abscissa x^ Where is the tangent parallel to Oxl
2
27. A projectile travels (1 + ) feet in t seconds. Show that it moves with
increasing velocity and acceleration. What is the velocity after 10 seconds?
Find an approximate value of the distance travelled during a small time A2
from the
tth second.
28. After
seconds a body
is
at
+ %bt 2
feet
from
its
29. If the
demand law
is
c,
show that
What
starting-point.
are the velocity and acceleration then ? Show that tho velocity
feet per second when a; feet have been covered.
is \/
-f
2bx
31. Show that the demand law p=a-bx 2 gives parabolic average and
marginal revenue curves of similar shape, both falling continuously as output
increases.
Where is marginal revenue zero ?
is the marginal revenue function for the demand p = Va - bx ?
What
32.
Under the conditions of Examples V, 8, how many tenements must be rented
per week before marginal revenue falls to zero ?
33.
Show
p +x
p at the
to
M.A.
178
34.
is
77
= */ax + b + c.
ax
4-
6
\-d is
is
1 4*
-j
\X
~\~
\
r^
Cf J
cost falls continuously as output increases. Draw the marginal cost curve
of the tobacco manufacturer of Examples V, 20.
36. If a firm
can produce two chocolate " lines " according to the conditions
CHAPTER
VIII
APPLICATIONS OF DERIVATIVES
8.1
WE
two ways.
in
The
"
depend largely upon diagrammatic intuition and are not
rigorously established. The less strict development is sufficient at
this stage, but it can be added that it is possible to provide formal
results
is
positive,
i.e.
through thd value x=a. The tangent gradient of the curve y=f(x)
is positive and the tangent and curve slope upwards from left to
right at the point with abscissa a. The converse properties hold if
/'(a) is negative.
Hence,
f'(a)>
falls
from
left to right at
the point
The
results
x=a.
how
how
steeply the
when we
consider
180
see
when the
rises or falls, it is
we know
derivative
is
If/'(a)
= 0,
then f(x)
is
neither
Ex.
1.
Here
ax
=4-2* =
-2(a?-2).
x = 2, as shown in
case,
we say
"maximum"
where x
Ex.2.
TT
Jtiere
FIG. 47.
The
In this
Fig. 47.
value y
=4
at the point
2.
y=
dy
-=- =
dx
is
exactly
opposite to that found in the previous case. The value of the function is
=
again stationary at x 2, but the function decreases as x increases up to
APPLICATIONS OF DERIVATIVES
Ex.
3.
Here
= 6x-3z2 + ia;3
2/
= 6 -6*+f*
J
ax
181
=f (z-2) 2
FIG. 48.
from which it is seen that the curve always rises except at the single point
where the tangent is parallel to the axis Ox. The stationary value, in this
"
maximum " nor a " minimum ". The point concerned
case, is neither a
"
is an example of what is called a
point of inflexion ", a name derived
from the fact that the curve crosses over the (horizontal) tangent as we
pass through the point.
its
sponding curve
is
182
"
can
arise.
maximum
minimum value
where the curve yf(x)
or
x
FIG. 50.
and
(similarly) at
minimum
minimum
point.
Thus
all
maximum.
The
maximum point
the maximum and
values.
curve
all
is
minimum
maximum
nor a
minimum
value.
Stationary
values.
by
Fig. 50.
is
APPLICATIONS OF DERIVATIVES
positive (the tangent being
and negative
183
maximum
Hence, the
value.
mum
All
values
is
zero.
(2) If f'(x)
function.
The
first is
"
neces-
"
We
can
184
not necessarily the " greatest " value of the function. A maximum
value is greater than all neighbouring values but there may be still
greater values of the function at
more remote
points.
Similarly,
minimum
"
"
smallest
value.
There
is
only
may
clear
is
stationary values.
to show a maximum or
minimum
value
if
the function or
its
derivative
is
not continuous.
The second
the
first
xa
is
I, p.
181.
APPLICATIONS OF DERIVATIVES
185
concave from below at the point where x =a. These results, which
are fully illustrated in Fig. 52, are independent of the value of the
derivative f'(a), of whether the tangent to the curve slopes upwards,
downwards or is horizontal at the point where x~a^ Hence
is
(1)
(2)
is
a.
y=f(x)
is
a.
Fia. 62.
is
"
yf(x)
xa.
tude,
is
increasing.
186
An
second derivatives.
in sign of /'(#)
is
maximum
minimum value
zero
and /"(&)
of the function
positive.
Hence
is
obtained at
x=a when
f'(d) is
values of f(x)
occur where
/'(*)=o.
(2)
"
"
condition is, as before, a
condition. The
necessary
"
"
second is a sufficient condition indicating situations in which only
a maximum (or only a minimum) value off(x) can occur. But it is
"
"
not complete, i.e. both
(see 8.9 below),
necessary and sufficient
since the case where f"(a) is zero is not covered. This case includes
The
all
first
minimum
more
useful, is
in its scope
than the
first
criterion.
8.4 Practical
methods of finding
values.
The
we proceed
derivative f'(x)
The equation
is
=
f'(x)
obtained.
is
solved to give a
number of
solutions
APPLICATIONS OF DERIVATIVES
(3)
Each
solution
(e.g.
x=a)
is
187
of f(x).
If there
is
value of /(#).
Or f"(a) is obtained and
:
negative, /(a)
is
positive, /(a) is a
is
an
sign determined.
a maximum value of f(x).
its
minimum
inflexional
If f"(a)
If f"(a)
is
is
value of /(#).
mum
The
Ex.1.
Here
ax
=3z2 -6x
ax2
= 0,
^4= -6<0;
A
value
at x
Ex.
y=#4
2.
Here
ax
= 4a3 - 12z2 + 16
- 12z 2 - 24*
ax*
x = - 1, the
a minimum
188
2x +
Ex.3.
x-1
^=--
Here
Ex.4.
y-
dy
dx
Here
2-x
x*+x-2
(x*+x-2)
We
h(h-4)
dy_
__,,.
=h
at x
-i
dy_
---
at z
The
first
The
negative to positive.
second expression changes in
I
1+
'
maximum
has a
x=0
2
value
at
-1
J^
j_^g.
The
case
is
that
the
maximum
is
smaller
This
FlG 53
of these values the denominator of y is zero.) The graph of the function, shown in Fig. 53, illustrates
how the presence of infinities influences the maximum and minimum
values.
Ex.5.
y=ax2 +bx + c.
3-*-
APPLICATIONS OF DERIVATIVES
There
a
62
is
maximum
if
is
4ac
-j-
negative and a
minimum
at x
if
is
--b
189
This value
positive.
is
The curve
minimum
Ex.
where
y=ax + b +-,
x
6.
a, 6
~dx
Since x
is
Ex.
and x
minimum
/v/--
value y
= 2 Vac + 6
y=ax*-bx+c+-x
7.
is
The second
is
positive.
at this point.
a, 6, c
and d are
dzy
satisfies
the relation
positive constants
2d
-**+#
is
zero,
i.e.
can be shown that this cubic equation has only one positive root, and
seen to be positive.
derivative
d
dy ==
2a*-&-~2
_|
It
Here
where x
is
^--
where
and x
dx*~x*'
~tf*
at the point x
values.
dy'-a- C
Here
has a
and
is
greater than x
Ex. 8. An open box consists of a square base with vertical sides and
has a volume of 4 cubic feet. What are the dimensions of the box for a
minimum
surface area
Let x feet be the side of the square base and h feet the depth of the
box. Then A# 2 =4 since the volume is given as 4 cubic feet. From this
we obtain h in terms of x. The surface area is
2
2
y = x + 4Ao? = x H
square
feet.
190
So,
is
The values of x
y are given by
when x =2,
--r
x*
ax*
Since
foot.
is
is
thus
= 2 feet
square base.
8.5
A general problem
of average
x,
we
derive
f(x)
=J-^
The average value is taken over the whole range from zero
"
"
the marginal value refers to the
margin
given value x
;
to the
at the
x.
In diagrammatic terms, if
is the point with
abscissa x on the curve y~f(x), then the average value of f(x) is
"
"
OP and the
radius vector
represented by the gradient of the
given value
now assumed,
dx
x*
dx*\~x
'
- 2xf'(
x3
j~
f(x)
-^ - occur where
Stationary values of
xf'(x) -f(x)=0,
X
i.e.
where
APPLICATIONS OF DERIVATIVES
At such a
191
dx 2
and, since x is taken as positive, this has the sign of /"(#). The
average value of f(x) is thus stationary at any point where the
average and marginal values off(x) are equal. The stationary value
maximum
it is a minimum if
/"(#) is negative at the point
at
the
point.
positive
f"(x)
In diagrammatic terms, a stationary value of the average value
is
if
is
curve
is
curve
is
is
maximum
if
the
it
* If the function is
single-valued and the curve smooth, then all changes of
curvature occur at points of inflexion. For multi-valued functions, on the
"
turns back
other hand, a change in curvature may occur where the curve
on itself " and the tangent is vertical. Such a point is not a point of inflexion.
192
cases
shown
in Fig. 55.
A point of one class (as illustrated in the first two cases of Fig. 55)
marks a change of curvature from convex to concave from below as
we move from left to right along the curve. A point of the other
class marks a change of curvature in the opposite sense (as shown in
the second two cases of Fig. 55). The actual tangent at the point of
inflexion is not restricted in any way it can slope upwards or downwards with any numerical gradient whatever. Upward and downward sloping tangents are shown in Fig. 55 for each of the two classes
;
O
Fio. 55.
In addition to the change of curvature property, another characof points of inflexion is evident from Fig. 55. A point of
inflexion always corresponds to an extreme value of the tangent
teristic
APPLICATIONS OF DERIVATIVES
193
Assuming that the single-valued function f(x) is finite and confirst and second derivatives, it is a simple
matter to express the properties of an inflexional value of f(x) in
analytical terms. The derivative/'^), as the measure of the tangent
gradient, must have an extreme value at any point of inflexion. It
is
ture changes from convex to concave from below, i.e. the point of
inflexion is of the first class. The converse change of sign of /"(#)
indicates a point of inflexion of the other class.
So
(2)
An
a
0.
where
f"(x)
point
If /"(a) =0, and if /"(#) changes in sign as x increases through
the value a, then /(a) is an inflexional value of the function
8.9 below).
of inflexion of the
first class.
Similarly, if f'"(a)
is
positive at the
xa
194
first
The
is
a stationary and
no account of
is
cases
zero.*
xa,
Stationary value
value
/"(a)
Stationary and
inflexional value
Extreme
/'(a) =
Inflexional value
f'(a)
method of
^-
Ex.1.
^0
f"(a)
locating inflexional
Here
There
and
non-stationary value
f'(a)=f"(a) =
^0
Two examples
Inflexional
is
x = 1. The
'*
dx*~
''
dx*
sign from negative to positive as we pass from left to right through the
point of inflexion. The point is thus an inflexion of the second class, the
curvature of the curve changing from concave to convex and the tangent
gradient
and
also the
points
and
on the curve
Ex.
2.
Here
g = 4(a;-2)*(* +
l)
g-12*(*-2)
g-24(*-l).
* The criterion is
fully completed in 17.6 below, where extreme and inflexional values are determined by the first non-zero derivative of f(x) of
whatever order it may be.
APPLICATIONS OF DERIVATIVES
195
y =0
6--
4--
3--
2--
'-1
FiO. 56.
is
FIG. 67.
minimum
196
8.7
maximum
An exactly
output or price to produce the largest net revenue and organises its
factors of production to give the largest output at a given cost or the
smallest cost for a given output. Similar assumed principles, in
Some
illustrate the
As a
first
*fi
The
is
different in the
two
cases but, as
we
fixes output,
is
The output
APPLICATIONS OF DERIVATIVES
x fixed by the firm for
conditions
maximum
first
TJ_-
condition
and
'
~(B-U) =
m
The
197
is -r
---
ax
ax
= 0.
(JR^
dR
i.e.
-.
ax
ax
A
,,
At
the output
.
,.
for
dxdx
i.e.
~~
d tdR
dx \dx
dx 2
dU\
__
~~
dx 1
d 2R
dx 2
d 2TI
dx 2
'
dx 2
Hence, at the equilibrium output, marginal revenue must be increasing less rapidly than marginal cost. This second condition is
200
150
Tons per month
100
250
30O
Fio. 68.
automatically satisfied if, for example, marginal revenue is decreasing while marginal cost is increasing as output increases from the
The
total revenue
198
such points
-=
-=
to
is
"
-p^
normal
< -r
"
form
by the curves of
When
the position is
The net revenue obtainable
Fig. 58.
from any output is shown by the vertical distance of the total revenue
curve above the total cost curve. This is clearly a maximum in the
P being parallel
monopoly out-
is
M.C.
.A.C.
50
100
150
200
250 N
300
The monopoly situation can also be represented on a diagram showing the average and marginal revenue and cost curves referred to the
same axes and scales. Fig. 59 exhibits these four curves as obtained
from the total curves of Fig. 58. Three of the curves happen to be
"
straight lines, but this is not an essential feature of the "normal
case here taken.
OM
is
now
given as the
MQ
of the point
APPLICATIONS OP DERIVATIVES
199
"
"
normal conditions. If the cost function is quadax 2 + bx + c and if the demand function is the linear
form p=/3-ax
first
*
There
condition
nothing.
always
satisfied.
Figs. 58
for equilibrium
^
(-r-s<T-s-)
dx 2 1
\dx 2
for cost
is
and demand
at the price
is
(R - 77) and
this is
maximum if
-72-7J-0 and
* It is to be noticed that, as far as our formal solution is concerned, there is
no reason to suppose that net revenue is positive even when it is maximised.
The total cost curve may lie completely above the total revenue curve. In
this case, the firm either goes out of business or stays in and cuts its losses.
Maximum net
revenue
is
then
minimum
net
loss.
200
The
first
condition
is
j.,
dn
v,
5(p*(p)>-5=o.
...
+ (p)
ATI
+pm --<f,>(p)=0
.,.
The equation
The
.,,
^smce
dn dHdx\
-^=-j- Tp )
maximum
net revenue
is
*I* R-n)\<o,
(
dp\dp^
f)
and inequality is a
and
the
possible monopoly price
corresponding output is x = <f>(p).
The second analysis of the monopoly problem, which is due to
Cournot, can be shown to lead to the same equilibrium price and
Any
value of
demand
for the
monopoly
function.
price gives
dB
dfl _(f>(p)+p</>'(p)
dx
<f>'(p)
_dp
~~
dx
dp
i.e.
dB dx
~
dx dp dB
~~
dx
dx
'
dp
is
analysis.
8.8 Problems of duopoly.
APPLICATIONS OF DERIVATIVES
201
The solution
2 =F 2 (x 2 ).
produces an output x 2 at a total cost of
of the problem of the distribution of the market between the two
duopolists depends entirely
that
d
This
is
j-,
the familiar equality between marginal revenue and marThe difficulty here is to express marginal revenue in a
ginal cost.
suitable form.
x=x
-{-x 2)
we have
first
duopolist, the
The
202
curve
"
in Fig. 60.
and
its
unity.
Ox 2
is
is
the
to
normal
this
curve
This
obtained.
Ox1 and,
axis
negative and
is
less
numerically
The two curves
than unity.
O and G2
the co-ordinates of
thus
P and
give the
FIG. 60.
is
in
TIF(x),
Gl when
The
reaction curve
intersection.
Thus, as
we
xl
shared equally
of x is given by
is
i.e.
iff
(x)
{iff
(x)
+ xtft'(x)} = 0,
i.e.
The
total
average and marginal revenue curves are as shown in Fig. 61, the
total output under duopoly is given by ON. This output can be
compared easily with that under pure monopoly. The monopoly
is
such that
APPLICATIONS OF DERIVATIVES
203
OM
output ON.
In conclusion, we can indicate the way in which the
general
duopoly problem can be analysed. It is assumed that the first
duopolist, when he varies his own output xlt expects the second duopolist to react
and vary
his
x
M.R.
FIG. 61.
x2
f(x1 ).
his rival's
Thus,
if
output to
dx
derivative
-^=f(xl
).
Cl
xl
g(x 2 ).
*
The
gives x^ as a function of
of the
it is
first
first
duopolist,
is
now
derivative -r^=g'(x 2 )
is
204
tion.
reaction curve
C2
as a function of
is
The two
tinctions
To
we can examine
conditions under
cient condition
The
analysis given above, in the case where the conjectural variations are
based on the work of Cournot. For the general problem, see Hicks,
The Theory of Monopoly, Econometrica, 1935.
zero, is
APPLICATIONS OF DERIVATIVES
205
that, if the property holds, then the condition is satisfied. The condition is satisfied by all things with the property but may be satisfied
also
sufficient condition is
such
the condition
is satisfied,
one which holds in both the ways described if the proif the condition is
perty holds, then the condition is satisfied
satisfied, then the property holds. The condition is complete and
condition
is
includes
An
all
is provided
the
conditions
maximum
of
a function
for
and
minimum
values
by
A
f(x) which has a finite and continuous derivative.
necessary con-
dition for a
is satisfied
minimum
at
or
some
inflexional positions).
maximum
a maxivalue is
whenever this condition is satisfied but some maximum
values can occur even when the condition is not satisfied. A necessary and sufficient condition for a maximum value is that f'(a)
and that f'(x) changes sign from positive to negative as x increases
through the value a. A maximum value must satisfy this condition
and we have a maximum value whenever the condition is satisfied.
a
mum value
EXAMPLES
VIII
function
is
monotonic increasing.
If y
ax* -f bx
4-
ex + d, express
dt/
this
as a
monotonic functions.
monotonic function.
1
-7
~
JL
and y
1
-z
~r~
if
are both
*C
is always a
by showing that y
When does it increase and when decrease? Illustrate
Generalise
Show that y
the latter
is
Draw a graph
to illustrate.
206
4.
all
single
minimum
value and
positive for
is
positive values of x.
6. If
lOz 3
6.
x=l.
4a;
3,
^=4
show that
Why
t/
Draw
value.
and of
-|-
1 )8.
Deduce, from
X
= -I-and
\
1
maximum
(a
Show
7.
Illustrate graphically.
8
2
y = x* - 4# 4- 6z -
criterion for
value at
case?
values of y = x 3 - 3x -
Find the
5.
y = 3rc* -
t/
= V3 - # a
has a single
0.
Illustrate
2
- 1) can be divided into two single-valued branches,
9. Show that y
x(x*
one with a maximum and the other with a minimum value. Deduce that the
curve representing the double-valued function is continuous, denned only for
certain ranges of x and shows a vertical tangent at throe points.
Draw a graph
when
12.
the rectangle
is
along an existing wall. The other sides are marked by wire netting of which
a given length is available. Show that the area of the run is a maximum if
one side is made twice the other.
13.
end.
The perimeter
possible.
(Take
IT
= 3-14159.)
yj
to the line ax + by + c =
dXt
is
+ by-i + c
APPLICATIONS OP DERIVATIVES
207
17.
Show
values of x.
Is the
2x - 3 + -
is
all
positive
ax + b + -1
that the curve y = ax* + bx* + ex can have only one point of inflexion. If a is positive, show that the curvature changes from concave to
convex from below as we pass through the inflexional point from left to right.
Deduce that the point of inflexion is also a stationary point if b z = 3ac.
18.
Show
19.
Show
%x
--
x +
by drawing a
is
a point
of inflexion.
21. Show that the curve y = $x is convex from below for negative values
of x and concave from below for positive values of x. Deduce that the origin
is a point of inflexion.
Why is this point not given by the criterion that the
second derivative is zero ? Check the result by considering the function as the
inverse of y = x 3
.
From
is a single-valued function of x, find where (xf(x)} attains maxiand minimum values and interpret in terms of the curve y /(#). If
x and f(x) are' both positive, show that {xf(x)} can only be a maximum at a
point where the curve y ~f(x) is downward sloping with a curvature less than
a certain amount.
23. Iff(x)
mum
Economic applications of
derivatives
-
x+b
sloping and convex from below. Do the same properties hold of
the marginal revenue curves? Show further that, for each of the demand
laws p = *Ja-bx and p a- bx z f the demand and marginal revenue curves are
downward sloping and concave from below.
downward
25.
Show
constant,
How
that the
and p
is less
26. With the aid of derivatives, check the positions of maximum total
revenue obtained in the cases of the demand laws of Examples V, 2, 10 and 11.
27. It
points.
is
given that a
Show
demand curve
is
is
also
^ >0j
at
all
208
either if
~~
is
positive or
if
-^
is
If the demand curve is always concave from below, does a similar property
hold of the marginal revenue curve?
28. By examining the signs of certain derivatives,
total cost functions
i
77=vaa? + & + c
and
77= ax
/j
te
fall
+c
t-d
(b>c)'
v
29. From the sign of the second derivative, show that the transformation
curve of Examples V, 25 is concave from below at all points.
30. If the supply of a good is related to its price by the law x=a>Jp-b + c,
where o, b and c are positive constants, show that the supply curve is upward
sloping and concave to the axis Op at all points. Illustrate with the case of
Examples V, 23.
31. An indifference map is defined by the relation (x + h)*Jy + k a, where
h and k are fixed positive numbers and a is a positive parameter. By
expressing y as a function of x and by finding derivatives, show that each
indifference curve is downward sloping and convex from below.
32. If U=ax 2 + bx + c is the cost function of a monopolist and if p = )3 - ocx
is the demand law, find the monopoly price and output when the monopolist
is assumed to fix the price.
Verify that this is the same result as when the
monopolist fixes the output.
33. A radio manufacturer produces x sets per week at a total cost of
(gx z + 3# + 100). He is a monopolist and the demand of his market is
x = 75 - 3p, when the price is p per set. Show that the maximum net revenue
is obtained when about 30 sets are produced por week.
What is the monopoly
Illustrate by drawing an accurate graph.
price?
34. If the manufacturer of the previous example, with the same costs,
produces for a demand of x 100 20 *Jp sets per week, show that he should
produce only 25 sets per week for maximum monopoly revenue. What is the
monopoly
price
now ?
In the case of Example 33, a tax of k per set is imposed by the goverment. The manufacturer adds the tax to his cost and determines the
monopoly output and price under the new conditions. Show that the price
increases by rather less than half the tax. Find the decrease in output and
monopoly revenue in terms of k. Express the receipts from the tax in terms
35.
of k
price increases
return.
Show
APPLICATIONS OF DERIVATIVES
209
How many
- ax and ho
38. Tho demand of a monopolist's market is p
j8
produces an
3
z
output of x units at a total cost of 77 ax - bx + cx + d. Show that tho output
for maximum net revenue is the positive root of
3ax*-2(b-<*)x-(p-c) = Q.
Taking the cost conditions of the firm of Examples V, 18, and the demand law
p = 50 - fJG, show that the firm must produce 3^ tons of its product per month
for
maximum monopoly
revenue.
What
is
F (x) = ax
40. If
relation
linear
is
+ bx + c
Show
2
41.
sugar refinery has total cost equal to (-rjtf + 5x + 200) when x tons
of sugar are produced per week. The fixed market price is p per ton. What
is tho supply curve of the firm?
What is tho lowest price to cover total costs?
At what price will 150 tons be produced?
A plant produces
42.
x tons of
steel
3x*
If the
market price
is
fixed at
33
+ 50x +
6s. 8d.
300).
per ton,
which
for values of p greater than this minimum amount. Connect the supply curve
with the marginal cost curve and illustrate graphically.
- <x.x. The market is
44. The market demand for a good is given by p
= a^x^ + b lx l + c l and
1
supplied by two duopolists with cost functions
"
" are
77 2 = a 2 2 2 + &2a; 2 + c 2- Assuming that the
zero,
conjectural variations
show that the reaction curves are straight lines. Deduce the equilibrium
output of each duopolist.
The
ducing identical
j
Example
O
33.
M.A.
210
2x 2 -
4)
second duopolist. Draw a graph showing the two reaction curves and deduce that the total output is now approximately 32 sets
per week. Compare with the monopoly output of Example 37.
and
goods
firm,
outputs for
Px to p y
maximum
48. If the firm of the previous example monopolises the sale of both A"
and
for
being given and independent, show
that the outputs for maximum total revenue are such that -/'(#) equals the
and
demands.
ratio of the marginal revenues from the
49.
X
Y
A steel plant is capable of producing x tons per day of a low grade steel
40
5x
If the fixed
and y tons per day of a high grade stool, where y = -^.--AU ~ X
market price of low grade steel is half that of high grade steel, show that
about 5 tons of low grade steel are produced per day for maximum total
revenue.
50. The steel producer of the previous example monopolises the sale of both
quality steels. If the prices of low and high grade steel arc p x and p v per
25 - 2y. Find an equation giving
ton, the demands are p x 20 - x and p y
the output x of low grade steel for maximum total revenue. Show, by a
graphical method, that just under 6 tons of this steel are produced por day.
CHAPTER IX
EXPONENTIAL AND LOGARITHMIC FUNCTIONS
9.1 Exponential functions.
WE have been
ya
write
x
,
where a
is
and
i.e.
1)
and
if
we
write b
= -> 1,
then
of a
212
is
if
we take
the base a as a
development.*
The graph of the exponential function can be plotted once the
base is given a definite value. For the particular function y = 2 x a
table of values of x and y can be obtained
,
be joined by a smooth line which is the curve representing the funcThe graph shown is constructed for selected rational
tion y = 2 X
.
y=2
is
thus continuous.
y=a x
1 is trivial.
is
then the
213
"
"
tracting
y=a x is
con-
any
positive
number p, we can
find a
p=a
An
the ordinate p.
positive
We
number can
be expressed as
greater
than unity.
and
34 = locals
and
7240 = 10 3
'
8597
,
Again
10^ = 2-1528
and
10*
= 31-6228,
9.2 Logarithms
and
their properties.
DEFINITION
If
p=ag
then q=log a p.
Since a logarithm is simply the index of the power to which the base
must be raised to obtain the given number, it follows, from what has
been said above, that any positive number has a unique logarithm
to a definite base greater than unity. On the other hand, a negative
number has no logarithm to any such base.
214
'
and
7240 = 10 3
and
5315
'
8597
,
follows that
These logarithms are correct to four decimal places. The two notations, one in power form and the other in logarithmic form, are
simply two ways of saying exactly the same thing.
The logarithms
their values
common
logarithms
and
the tables.
way
facilitate
in
numerical work.
log a
1~0 and
LAW
and al =a
log a a =
all
1.
logarithms
II.
is
the
sum
of the
lg
'
(Pi
#2)
The logarithm of a
= lga#i + Iog a p 2
quotient.
LAW
I.
separate logarithms
LAW
is
the difference of
215
quotients of
to give the
Law
II
Notice, also, that the powers of p to which Law III applies include
fractional powers.
For example, we can write
when powers are multiplied, we expect that the logarithm of a product is the sum of the separate logarithms. Formal proofs of the
three logarithm laws, based on the index laws, are as follows
In Laws I and
logaPi
so that
- q1
and
Iog a p 2
and
p 2 = aq
pl
p 2 ~ aft aq = a qi+92
aft
Then
Pi_aft_ aqi
p 2 ~a**~
log a (pi
and
In
Then
i.e.
p 2 ~ql + q 2
)
log a
Law
III, let
q2
*.
pl
So
II, let
_ qt _
~ log a ^! + Iog a p 2
\Qj
a
log p =qso
n
p
lga(p
that
p ~a q
in theory
216
dealing with powers and provide, for example, the only simple means
of solving an equation in which the variable appears as an index. As
Here
i.e.
x log 2
3,
3
log 4 - log
~
i
2
log
<Y
*/
It*
.6.
log 4 log
The logarithms can be to any base. Taking the base as 10 and looking up the logarithms concerned (to four decimal places) in tables,
thon
__
*-
0-6021 -0-4771
_ 125
"30l"~' 4IO>
6*010
most
com-
pound
LAW
As a
a.
Iog 61og 6 a =
fl
l,
Then
in
= log a b log b p =
we have
Iog a 6
i.e.
1,
log&#
so that
bq
217
Iog 2 p
From
tables of common logarithms, therefore, it is possible to construct tables giving logarithms to any base other than 10.
9.3 Logarithmic functions.
If the variable y
a given base
a,
we
y=log a x.
The
from tables of
arithms.
The graph of
y=log2 x
is
shown
in Fig. 63.
It
log-
can
constant
multiples
of
y=logb x
can
be
-2FIG. 63.
derived
218
varies with the value given to the base but the general shape of the
graph remains. Further, since the graph of an exponential function
is the graph of the corresponding logarithmic function with axes
transposed, one exponential graph is obtainable from another ex-
"
"
"
"
in
or
ponential graph by a process of stretching
contracting
the direction of Ox. This fact was stated above
it has now been
;
justified.
These properties are obtainable, of course, directly from the definition of a logarithm but they are particularly clear from the graph.
It is interesting to compare the three function types
In their simplest forms, we can write
considered.
we have now
where a and a are greater than unity and where n is taken as positive.
As x tends to infinity, so does the value of each function. But it
can be shown that log o; tends to infinity more slowly than xn and the
x
latter, in its turn, tends to infinity more slowly than a
So, for a
tt
loga
x<x <a
n
magnitude
x
.
ax
Hence,
and
is
_(l+hy
~
(!+&)*
l+lch
lies
jch_
so x, tends to infinity.
a*
So
--*oo
x
and the
as
#-><*>
219
a x ~ (a\ n
xn
\xJ
T-
Now
(la*\
and
'
where yv
\ny]
x
-,
and
so as x, tends to
infinity.
xn
Finally
and
a*
is
Xn
n
loga #, x
and
z,
so as x, tends to infinity.
x"
j
and
><x>
where z=nlog
*"a x,
a
bo
and
loga x
>-oo
as
x-+<x>
10ga#
and a x must be
in ascending order of
magnitude
if
trated
by comparing the
three functions
graphically.
the
graphs
functions
same
Fig. 64
shows
of the
three
on
plotted
scales.
It
is
the
clear that
10
x.
method
is
Now
220
is
thus obtained.
100,
150,
200,
250,
100,
150,
225,
337-5,
300,
506-25,
first
scale, the points representing the first sequence appear at equal distances from each other and those representing the second sequence
2,
2-176,
2,
Hence, on a logarithmic
2-301,
2-352,
The logarithms
2-398,
2-528,
2-477,
...
2-704,
...
are
80,
100,
80,
scale, it is
60,
40,
64,
51-2,
20,
40-96,
show decreases of 20
units
natural scale.
It appears, therefore, that equal distances between points on a
natural scale indicate equal absolute changes in the variable, and
equal distances between points on a logarithmic scale indicate equal
on a natural
scale,
then
221
The same
log
*^3
*^2
i.e.
is
thus
clear.
If
we wish
to
Many
222
a logarithmic
the variation
is
further
lates proportional
if
amounts
is
to
increase
is
thus useful
When we
rates in
correlate, for
great
changes.
* See
Gibrat, Les Intgalites iSconomiques (1931) and Allen and Bowley,
(1935), pp. 63-5 and Diagram XIII.
f This follows since log x increases more rapidly than x at first and then
Family Expenditure
and
223
diagram
demand
or supply
relations
"
compared with the norm
as
".
9.5
1.
The
Value of
total imports,
U.K., 1820-1897.
scale.
In each case, the years are measured
on
axis
a
the
horizontal
natural
scale and each import value is
along
of
the
at
the
centre
averaged period.
plotted
224
imports j
Mn.
IMPORTS,
U.K., 1820-97.
500
400
300
200
100
1820
1830
1840
1850
1860
1870
1880
1890
1830
1840
1860
1850
FIG. 65.
1870
1880
1890 Years'
Years
Imports
Mn. *
500
400
300
200
100
75
50
25
1820
225
to be preferred.
Ex.
2.
Number
The above table provides a picture of the decline in employment between 1929 and 1932 in various important industries and of the correp
M.A.
226
can be given by taking per cent, changes in the first period along the
and per cent, changes in the second period along the
vertical axis. One point is then plotted for each of the 25 industries, the
horizontal axis
height of the point indicating the per cent, change 1932-5 and the horiFor convenience, the
zontal distance the per cent, change 1929-32.
Thus the
decline in the
plotted point
(80,125).
log 80
i.e.
So,
is
Now
- log 100 = (log 125
log
100).
left
of the
100 mark as
A logarithmic scatter diagram of the data is shown in Fig. 66, the points
representing the decline and recovery of the various industries. Most
industries are shown by points in the N.W. quadrant, a decline followed
Public
light.
227
is
to be noticed that
imports).
40
50
60
70
80
90
10O
U.K., 1929-35.
110
12O
13O
FlQ. 66.
(as in the case of the natural scale) to the fixed origin or zero
The logarithmic
mark.
have no logarithms).
An
there-
'
*
Special graph paper, marked in this way either for semi-logarithmic or
for logarithmic graphing, is provided commerically.
But ordinary graph
paper can bo used and adapted for the purpose by plotting distances directly
228
by considering what
On
relation
is
natural scales,
is
on a logarithmic
y=ab x
is represented by a straight line graph.
For, we can write the
relation as log j/=log a + xlog fc, i.e. logy is related linearly to x.
Finally, on a logarithmic graph, the relation
y~ax b
For, the relation can be written as
is related linearly to logx.
So, an
as
a
line
function
on
a
appears
straight
semi-logarithmic
exponential
graph and the line's gradient is the logarithm of the base of the
appears as a straight
line.
If y
the
is
y~ y/
where a and
x, for
example, Pareto's
Law
is
Plotting on a logarithmic
are constants.
9.6
we
obtain a
Compound
A sum
of
interest.
100
is
If interest
is
compound
interest
the
amount
first
year.
Again,
100 (1-04) 2
is
the
y = 100 (1-04)-.
Suppose now that interest
is
of 4 per cent, per year, 2 per cent, is added in each first half-year
and another 2 per cent, in each second half-year. It follows, as
229
100(1-02)
100(1-02),
2
,
100(1-02)
3
,
...
y where
is
y=a(l+r)
x.
If the interest
is
In this
it is
result,
to be understood that x
is
case,
Discontinuity
is
an
essential feature of
it is
on yearly compounding.
a(l+r) 2x >a(l+r) x
i.e.
For,
what
is
is
the
called
"
yab nx
where
1+-
is
The
IV
growth
is
230
ing
is
curve
is
then a straight
is
interest
line
The compound
growth
+ -)
The
til
simple problem
way in which logarithms are to
be used in dealing with compound interest growth
illustrates the
National Savings Certificate (1935 issue) costs 15s. and realises 20s.
at the end of 10 years. Assuming that interest is added four times a year,
it is required to find the rate of interest
represented by this growth. If
the interest rate
is
the
amount
is
20 = 15(l+Jr) 40
'
So,
i.e.
i.e.
log(l+Jr) =0-0031235,
l+Jr = 1-00722.
=
So lOOr 2-89 approximately and the rate
i.e.
cent, correct to
is
is
2-9 per
is
added at
definite
It remains to
n times in the
of n are
year.
case,
l\ n
11+-)
nj
\
is
the amount of
interest
at the
certain values
It is clear
that
as
is
231
1 -f
-l\ tends to a
neighbourhood of 2-718,
= Lim
i\n
(in
nl
n->oo \
na
Our
l\
+-
year,
Tft/
= 2-71828.
amount of
when the
e.
is
nl
( 1+-)
1
-f-
m/
n/
[\
L\ m
since
(/
r\
= a<[l+-)
}
}
rx
is
(f
l\ mV*
=aUl
->ae rx
+ -}
ml
[\
>e as m, and so as
n=rm,
is
as TI->QO
tends to infinity.
a multiple of
-, it
Also,
tends to
less
to infinity
and
and
less
discontinuous as
interest
a concept of continuous
process in
result is :
is
which interest
after x years when interest is compounded continuously at the nominal rate of lOOr per cent, per year is given by
The amount of a
y=ae
*
rse
.
232
This
x, is
continuously in actual practice, the formula can be taken as a convenient and approximate representation of the actual state of affairs
when
interest
is
compounded
A sum
and
frequently.
capital values.
is
So
Similarly, if interest
is
is
ye
then
'
n)
=a,
y = ae~
i.e.
cent.,
~\nx
r
we have
m^*m
Finally, if interest
cent.,
rx
.
The
fa
on a whole
series of
sums due
series
am
the current and in
!,
a2
...
successive years of
represent the values in
the crops obtainable from a piece of land, of the outputs of a given
may
233
stream
We
"
This sum can be called the capital value of the land, machine or
income stream in question. It represents the sum which must be
invested now to produce incomes of a
%, a 2 ... am in successive
It is to be noticed that the capital value of an output or
years.
income stream depends, not only on the items of the stream and on
the number of years that the stream flows, but also on the interest
rate that is taken.
One and the same income stream has different
,
when
capital values
Simple
fact.
32,
the calculation being made with the aid of logarithms. A similar computation shows that the capital value is 116-2 if the interest rate is
only 2i per cent. These are the two sums which can be invested now
to produce, at the respective interest rates, the given income stream over
1,
2,
new
4 and
fourth year, it
capital value of this holding, taking interest as added once yearly at 5 per
cent, per year, is given
by
i
1 -05
1 -05 2
120
6
i
1 -05 3
=110-4.
+ T-^i )=*
1 -05V
But,
if
is
234
y=f(x)
1+r
an,-
Ihis
is
maximum
if
The
-r
dx
= n andj
m=0
l+r
l+r
-r
dx 2
and
<0,
i.e. if
&
1-fr
<0.
first
which,
is
satisfied in the
"
normal
"
case.
i\n
is
y=ae*,
where a and b are constants. But this function can be derived quite
easily from the standard form y=e*. The method of derivation is
* See
Fisher, The Theory of Interest (1930), pp. 159
See also, Examples VI, 31.
et aeq.
and pp.
514-5.
235
and
ter.
67.
$ x by
stretching in the
ordinates are
doubled,
shown
as
standard curve y
the curve y 2e* x
.
eral, if
a and
curve
the
ex
into
In gen-
b are positive,
y=aebx can
be
derived from the curve y e x in two stages. The standard exponential curve is first reduced in the Ox direction in the
if b> 1 and stretched if b <1.
The curve
then expanded in the Oy direction in the ratio a 1,
stretched if a > 1 and contracted if a < 1 As a result, the ordinate
ratio 6
1, i.e.
so obtained
i.e.
contracted
is
/y
of the curve
* If the constants
236
y=ae rx can be
noticed.
present or discounted
value of this sum is a if the
the
50
interest
60--
is
reckoned continu-
The
20-^
reason,
8
12
16
FIG. 68.
it
can be described
as a discount curve.
system
curves
yae
of
rx is
discount
derived
by
one curve passes through any given point in the positive quadrant
of the plane. The discount curve system provides a simple means of
comparing the present values of different sums available at different
237
one rate of discounting. The whole system changes when the rate is
changed, the curves becoming steeper for larger rates of interest.*
y=ae rx becomes a
discount curve
when
it is
If b
is
= e}oe *b
y=ae(cloe *W
i.e.
Ep
Further, since
y=
log - cr
'
i.e.
common
it is
convenient to take
10.
e.
it is
is
is,
=1
^^ =
lo gio e
(0-4343) log1Q x,
238
EXAMPLES IX
Exponential and logarithmic functions
1.
8-9
Draw a graph
of y
Read
10*.
off
tables of logarithms.
Add
the
Check the
5.
By
result
v- logy +$iogv-o.
if it is
given that
6.
when #
7.
+ 2x
+ 3x
as
sums and
differences of
this expression
2-4.
Show
that (x
N/a?
log(x
8.
in tables.
Indicate
why
1) (x
*Jx z
1)
= 1 and deduce
+ \^^T) = - log(# -
Iog 2 #
and
x* 3"*
*Jx 2
that
1).
infinity.
Deduce that
9.
#,
239
Plot the data on a logarithmic graph and show that the plotted points lie
downward sloping line. Deduce that Pareto's Income Law is
m
approximately satisfied (y a/x ) and estimate the values of the constants
a and m. (See Bowley, Elements of Statistics, 4th Ed. 1920, p. 347.)
close to a
diagram on logarithmic
scales for
I,
30 as a scatter
both variables.
and read
off
the value of
zx
e.
2e~l x
Show how
these curves
x = log (y 416.
*/y
Show
1)
that y
-~^
+ ez^
Q~~
and x
Jlog-1
+ I/
y
240
as #->oo
20.
What
the
is
invested to realise
is
per year
added
In how
Compound
amount of 100
interest
problems
(a)
yearly,
(b)
twice yearly,
(c)
continuously?
many
22. A National Savings Certificate costs 15s. and realises 20s. after 10 years.
Find the rate of interest involved when it is added (a) yearly, (6) twice a year,
Show that the nominal rate is
(c) eight times a year, (d) continuously.
0-4342945 and
smaller, the more frequently is interest added. Take Iog 10 e
use Chambers' seven-figure logarithmic tables.
The
23.
What
24. In a previous issue (1933), a certificate cost 16s. and realised 20s. after
8 years, 21s. 4d. after 10 years and 23s. after 12 years. Find the interest rate,
added yearly, for eacli of these periods. Is it true, as claimed, that the present
issue bears the same rate of interest as the 1933 issue over the 10 years period?
26. Interest at lOOr per cent, compounded yearly
at 100s per cent, compounded n times a year, a given
amount
after
D rates.
by an amount equal
is
equivalent to interest
Show
to fs
that
2
(l+
s\ n
)
-1.
approximately when
s is small
26. If lOOr per cent, compounded yearly and lOOp per cent, compounded
continuously are equivalent interest rates, show that p = log e (l + r). Plot a
graph of this relation to show that p is always smaller than r but approxi-
mately equal to
27.
m years.
when
is
small.
interest is added yearly at lOOr per cent, per year. By writing the sum
of this geometric progression (17.1 below), show that the fund will amount
ar
finally to a if
when
Show
that approximately
79-5
must be
a machine costing
(See Fowler, Depreciation of Capital, 1934, p. 131.)
10 years.
241
1000 after
28. If the rate of interest (added yearly) will be 100?*! per cent., 100r 2 per
the next
... 100r
years, show that a will amount
TO per cent, during
rm ) at the end of the period. What is the present
to a ( 1 + r x ) ( 1 + r 2 )
( 1 +
value of 6 duo in
years ?
The interest rates in successive years from now will be 4 per cent., 3 per
cent., 2 per cent., 2J per cent., 3J per cent., .... Find the amount of 100
after 5 years and the present value of 100 due in 4 years.
cent.,
. .
29. Find the present value of 100 due 10 years hence when interest at
2 per cent, per year is compounded (a) yearly, (b) continuously.
falls
by 200
per year,
31.
(6)
Why
can
- bo taken as the
present value of an income stream of
(Interest at lOOr per cent,
compounded
yearly.)
fir
33. Interest is added yearly at 3 per cent, per year. What is the present
value of a perpetual income of 100 beginning two yoars from now? This
income can be produced by investing 2000 in a business this year and 1200
next year. What is the present value of the investment? Is it a profitable
investment ?
*
34. Draw a graph of certain curves of the discount curve system when the
rate of interest is fixed at 5 per cent. Use the graph to determine whether
220 due in 10 years has a larger or smaller present value than 150 due in
3 years, interest being added continuously at 5 per cent, per year.
is
M.A.
CHAPTER X
LOGARITHMIC DERIVATION
10.1 Derivatives of exponential
and
y~ log
The
x.
before,
functions.
first principles,
using
the definition of the derivative and the properties of the function
But the exponential and logarithmic functions are inconcerned.
of them from
is
first principles,
+ h) -log x
log (x
1.
---s
where n denotes
I
x
jnt
and tends to
l\ n
the expression (1 f ~
T
Lim
.
log
^-v(x
h-+o
+ h) -log x 1 T
^-=-Lim
.
A^
i.e.
The function
infinity as
e as
/_
log
e
_>*,
1
\
But
h tends to zero.
n tends
IV
+-
to infinity.
1.
So
=-]oge=r-~
x
x
nl
r logx = x-.
ax
-
inverse to y = e x
is
x= logy
with derivative
dx
dy
-=-.
LOGABITHMIC DERIVATION
243
d r
gOJ
dx
dy
d
-~e x = e x
ax
VUJb
i.e.
The
Sy
a other than
Since
we have
^ log
x = log a
a* = (^8e a )
Again
where u
log,
x = - log a e.
is
used.
So
-~a x =a x log
hee a.
dx
The
d
dx
^.
.,
Similarly
or
An
__
d .
du
du
du
d
u
~r & ~r- = e -r~
dx
du dx
d u
-7- e
ax
'
>
d
important special case of the latter result
dx
e.g.
6
du _ 1 du
dx u dx
e a*
= ae ax-
d
x=
-e~*.
-j- e~
dx
is
244
The
list
d
"
j-xnnx* 1
dx
now
constituted,
is
e*
dx
d
The following
lished
=e *>
-d
aX = a * lo Z> a
'
1,
d n
u
dx
d
dx
where u
is
du
nu n-l
du
dx
Idu
u dx
d
dx
dx'
'
The
following examples illustrate the practical method of evaluating derivatives when the functions concerned involve exponential
Ex.
2.
-e* - e*
dx
dx
2
(a; '
)
- 2xe**.
'
~e-#=e-**^-(-x*)=
dx^
dx
2)
In general,
= (2x
LOGARITHMIC DERIVATION
Ex.
3.
-jax
-jctx
= 20:6* + x2 e x = x (x + 2) ex
x*e*
(x
245
In general,
-,-
(tx
n
A
Ex.4.
(a^
4-
bx
+ c)e* = {ax 2
4-
(2a
-f-
6) a; -f (6
+ c)} ex
_
1-2*
In general,
d
T~ log(ax
dx 6
.
--
ax + b
In general,
^
-=- log (aa:2 + ox + c)y
dx 6V
,
Ex
Ex.
7.
-r-
EX.8.
246
Ex.
by
9.
d,
d*
d*
Thus
dr
__
dx*
dr
Ifyf(x)
is
^
~
dx
an important
result with
ydx'
many
practical uses.
function
as x increases
in
the
value
the
of
change
The proportional
from x to
(x
4-
h) is
-f(x)
The
point x
is
thus
Lim
The
derivative
Lim
f(x)
hf(x)
=-
dx
A _>0
ydx
dx
ydx
dx
natural scales, so
,-.
dx
when
we
djlogj/)
dx
The logarithmic
method of
LOGARITHMIC DERIVATION
247
= log u + log v,
and
1
dy _
Again,
T
it
y=
u
-
Idv
vdx'
udx
ydx
\
du
we have
log y = log
= log u - log v,
and
Idv
- Idu ___
ydx udx vdx*
1
___dy
*^_
__
These two results are equivalent to the product and quotient rules
for derivation given above and we have now established the rules
with the use only of the sum or difference rule and the notion of
logarithmic derivation.
_.
If y =
23...
where
t^,
u2 uz
,
...
and
vl9 v 2 v 3
,
...
are
any given
^1^2^ 3 *
=
log y log
1
dy
dui
u^dx
ydx
4-
log
1
du z
u z dx
1 du 3
u 3 dx
dv
v^
dx
'"
dv z
v 2 dx
...
dv 3
v 3 dx
more convenient,
in practice, to evaluate a
Further,
derivative by writing the logarithm of the function before proceeding
to differentiate. In fact, we prefer to carry out the steps of the
it is
often
logarithmic derivation process rather than quote the rules for the
derivatives of products or quotients. This remark holds particularly
Ex.
1.
248
Here
Idy
ydx x
1
and
1)
-log(#
x*-2
x+
x+2
-x
dy
-jdx
i.e.
x 2 -2
x*-2
Ex.2.
Here
= 2 log x + J
log y
Idy
--
and
1)
- \ log (x +
1),
11
1
-
--
log (2&
a;
rl
" X /2aT
^-a?
^
x+1
Ex.
3.
Here
2o:(z
+ 1) (2s -
n
x~ a
^, where a and r& are constants.
y = x e~M
~ 2
log y = n log a? 1 (#
-_j*
and
(a;
-a) =-(
a;
a:
i.e.
dx
10.3
A problem
involved.*
known way
after
as time goes on, the selling price per unit being f(t)
years. The function f(t) is assumed to be known and to
increase with
on
The Theory
Political
is
LOGARITHMIC DERIVATION
249
The problem
at a later time.
selling the
It is
market rate of lOOr per cent, over the periods concerned. Then, if
x denotes the present value per unit of the good sold after t years,
x=f(t)e~
rt
storage period
is
given by
dx
dT
log x =
Now
(t)
- rt
and
d 2x
^ <0
where
"
(t)
= log / (t)
and
d(ldx\
dt
\xdil
The
The
first
ld*x_(dai\*_
x'dt*
(>
x*\dt)
condition
is
are thus
that f"(t)=-rlogf(t)=~(tt
J
'
is
equal to the
\tf
sale, therefore,
the
We
is
Further,
i.e.
The curve
250
given by
dt
Interest
is
f(t)
rt
represents a system of discount
per year and y = xe
= 0)
at time
of
t.
,y
available
The system
^ -"
c^'
lines
y = x.
One
P
>.
Q where
X
FIG. 69.
ya.
obtained
when x
or
where a discount
OQ
line
is
now
is
-'
/w
=r.
i.e.
t
is
satisfied in the
rapidly at
tangent at
first
"
normal
"
This condition
dtf(t)
.*ffiQ}<0.
slowly.
maximum,
is
LOGARITHMIC DERIVATION
The
10.4
We
elasticity of
251
a function.
+ H)y
77
/(x)
--
- -
~~j~f~
= log
proportional terms,
is
/ (x)
dv dvdydx
*
=
du dydxdu
and
The
where
?/,
is
where
we can
x
write
eu ,
*.
are expressed in
thus measured by
termed the
"tpti
elasticity
ydx
and
jy
= -/(#).*
can be denoted by
Mix
MiX
Hence
is
v,
ydx
Idy
xdy
=#=ydx
ydx
d(logx)
This rate
f(x)
in x
Ex
d (log x)
y dx
* The notation
adopted here is that suggested by Champernowne, A
An alterMathematical Note on Substitution, Economic Journal, 1935.
native notation is E x (y) E x {f(x)}. No established notation for elasticities
is in current use.
252
diagram
then -A~^;
elasticity can be read off the logarithmic graph of the function just
as the derivative is read off the natural graph.
and y are
x'
=Xx and
py
y'
x' dy'
^Xxd (//#) _ Xx
y' dx'
i.e.
respectively, then
p,yd(Xx)
10.5
The evaluation of
is
JJL
dy __ x dy
pyXdx
ydx*
unaltered.
elasticities.
fi QJ
x
a multiplicative factor
-,
is
-~ with
simply the derivative
dx
which makes
it
independent of units, we
can obtain
elasticities
It is
u and
elasticities
Eu
uv
Ex
E(uv)
_Eu Ev
Ex "Ex
Jf
Ev
\vJ
Ex'
Eu Ev
of simple functions.
LOGARITHMIC DERIVATION
if
Further,
is
a function of u, where u
is
253
a function of x, then
Ey
'
'
The other
__
[_
way.
be noticed that the elasticity rules are simplest in the
It is to
cases of product
for
sum and
difference.
an
elasticity is
E(u+a)__
~
Ex
i.e. it is
Eu
E(au)_Eu
Ex ~lx'
an
~u + aEx
As examples of the
=r (ax + 6)'
Ex^
Hence
it is
ax
ax + b'
.-
-E-
(ax?)'
Ex^
and
(ae
Ex^
ax
)
'
= OLX.
yx?a. In
points
elasticity
yax
elasticity
yax
- a) at
all
has elasticity
1)
at
all
points
at all
points.
In
represented by an
with gradient a on logarithmic scales
11
is
shown
as a
downward
The
taken.
Certain points
may
254
the elasticity
E
If
iLx
{/(#)}
is
E
if
vr {/(&)}>
litX
On
f(x).
Con-.
pi
f(x)
is less
It follows that a
we have
maximum
or
minimum
value of the
"
total
"
ex-
J^
expression
-I
is
1.
^
x
maximum
that the
"
or
minimum and
"
average
equal (see 8.5 above).
and
"
"
"
average
value
is
is
The
demand.
for a good can be represented, under certain
The
conditions, by the monotonic decreasing function % = <f>(p).
10.6
elasticity of
LOGARITHMIC DERIVATION
255
demand
at
any
price.
its
value
is
ni ,. A
Elasticity
y of
J
.
/.
7
7
pdx
dilogx)
demand
rj= - - - = --]. ^
'
xdp
d(logp)
The value of
units,
When we
is
If
demand
product of
and
and
its
value cannot be
factors.
For example,
Two
The
inverse
respect to
demand
demand
is
function
^-,
p ax
is
p^(x)
and the
the reciprocal of
77.
elasticity of price
Some
with
256
_p
dx\
_MPMT _MT
MP
Ox).
Hence
parallel to
is
Op) and
-^-^-
(since
MT PT
gives
NP
is
-_. =
5-
parallel to
We
M
FIG. 70.
FIG. 71.
The second method depends on the fact that any curve with
equation xpa is a demand curve with unit elasticity at all points.
Such a curve can be called a constant outlay curve, since the outlay
On logarithmic scales,
(xp) of consumers is constant at all prices.
the curves for various values of a form a set of parallel straight lines
sloping downward with unit gradient. On natural scales, we have
the system of rectangular hyperbolas shown in Fig. 71. Through
each point P of a given demand curve AB, there passes one of the
constant outlay curves. The elasticity of the demand curve AB at
LOGARITHMIC DERIVATION
the price axis.
This
is
25?
same
for
both curves at P.
If the
demand
curve
AB
AB.
AB
AB
touches the constant outlay curve at P (as shown in Fig. 71), then
has unit elasticity of demand at P. Hence, the path of a given
demand curve across the constant outlay curves gives us a good idea
of the variation of demand elasticity along the demand curve.
AB
10.7
But the
elasticity of
demand
77
- - -7- and so
djK
is
(1)
If
revenue
mand)
rj
and
revenue
mum)
dx
is
positive
This
increases.
(2) If
price
-,
is
and
is
= de-
value.
(3) If
77
<1
at a given price
in price
increases.
This
is
is
258
that the
AB of Fig.
71.
at
with output at
FIG. 72.
(rj
x=a
= 1) and
output
(77
increases.
expression for
(tx
above,
77
is
positive, marginal
outputs.
xa.
revenue
is less
less
than
a,
is
j
LOGARITHMIC DERIVATION
259
The
law,
linear
demand
p~ X'T -c,
first case,
77
p=a-bx, and
the hyperbolic
demand
=6
In
-f-
the
law,
77
1
zJ (l+-)(l-&C-C20.
a \
xl
>
gent at
If the tan-
any point
on
A.R.
Q on
the marginal
revenue curve at the same
point
output as P, then
_ M.R.
\
the
FIG. 73.
AP
referred to
gradient of
the price axis is twice that of
_OM_
'
MA
QN are per-
-..p
260
where
77
is
demand
the
elasticity at P.
J,
i.e.
and
So
The gradient of AP
the gradient of
AQ
MP = NO
NO
T ^=-r = 2 -=~%,
i.e.
twice
A, draw the line AQ with gradient to the price axis half that of
AP and find the point Q on AQ with the same output as at P. Then
in
is
revenue curve
is
traced
demand
elasticity.
The
Here the
cost problem.
The value of
/c
is
U dx ~ d(logx)
,, 1
LOGARITHMIC DERIVATION
261
__
can be expressed
the elasticity of average cost TT=
x
irdx~ndx\x/
From
these results,
it
FIx*\
follows that
dx
U dx
~~~
in
K=
in
output
is
is
If
and average
K> 1
situation
is
cost
and the
K<
falls
with increas-
xa and
less
is
less
* The
elasticity of total cost is described by Professor Moore (Synthetic
"
" and
coefficient of relative cost of production
its
Economics, p. 77) as the
"
of
relative
of
coefficient
".
as
the
The
organisation
efficiency
reciprocal
reciprocal of K has also been used by W. E. Johnson (The Pure Theory of
Utility Curves, Economic Journal, 1913, p. 508) and by Professor Bowley
(The Mathematical Groundwork of Economics, 1924, p. 32).
f As a slightly less severe normal assumption it can be taken simply that
K = 1 at some definite output x a, K< 1 for outputs x < a and K > 1 for outputs
x>a.
262
cost for outputs greater than a. At the output x=a, marginal cost
is rising and
equal to the (minimum) average cost. The normal
forms of the total, average and marginal cost curves are shown in
the two diagrams of Fig. 74. The forms of the average and marginal
cost curves can be checked from the form of the total cost curve,
and conversely. If
is the point on the total cost curve at a
given
output, then average and marginal cost are to be read off as the
gradients of OP and of the tangent at P respectively.
The simplest
is
where
a, 6
and
The
Here
x(2ax
derivative of K can be
increases.
The
total,
as x
case
may
output
shown
less
additional
is
is a minimum.
This is
The quadratic cost function does not exhibit this
property and the simplest normal cost function to do so
in Fig. 74.
U=ax3 - bx + cx + d
2
LOGARITHMIC DERIVATION
where
a, b, c
and d are
2
positive constants (6 <3ac).
2 Average cost = ax
and
-:
Since
-7 2
dx 2
-=
dx
is
Here
3ax 2 - 2bx
Marginal cost
263
+c
=6ax-2b.
2
positive for all values of x (since 6 <3ac)
at the single
output
L
^
x~
---
3a
and
since
x~-
has a single
8.4,
Ex.
7).
minimum
minimum
The marginal
3 c
value - -
cost curve
is
b2
3a
(see
at the output
x
L
<dd
3a
The curves
are thus
We
Elasticity of productivity
1)
= -Xdx = rf(loerx)
If
<
264
EXAMPLES X
Exponential and logarithmic derivatives
~
2X , e l x ,
log
2.
l)(#
and
ex , e 1+a! ,
x 2 e~ x ,
1
3.
-,
+x 2
log-L
X
~~~
a
)
eax + b
verify that
= aenx
3.
4.
Show
5.
Show
that
~
ax
that
l(e
+ e~ x )*} = e 2X - e~ 2X
-=- (x logo?)
ax
d
dx log
6. Establish
~1 4- log x,
4-
vrc 2
b
.
x.
ax
--
'J
=
x
(1
and
logrr)
(x
- a a ) - ~r=F^- "vx 2 ~ a 2
'
~lo
dx
7.
8.
Show
9.
By
that
-j-j.(xe
= (x + r)ex and
-^(xe-
00
=--
l) (x
- r)e~ x
and
10. Find the derivatives of e ax9+bx+c
before derivation.
11.
By
logarithmic derivation,
and
(ax*
+ bx + c) ex by taking logarithms
show that
n
x
)^xx (l^\ogx) and dx
~(x
r (x e ax+b )--=(ax + n)xn
dx
e ax+b .
13. Show that the curve y = xe~ x has one maximum point and one point of
inflexion. Verify that y and its derivatives tend to vanish as x -> oo . Illus-
trate
*
The concept of
17).
LOGARITHMIC DERIVATION
14.
Show
that,
265
15. If
?(e
changes sign at
roughly resembles a parabola with a minimum at x = 0.
be derived from the curves y = ex and y e~ x ?
16.
Ify =
x ,showthat
How
Deduce
ax 2/(l-7/)and-2/(l-2/)(l-22/).
dx*
and 1 as a; increases. Show that the
that y increases continuously between
curve representing the function has a point of inflexion at x = and indicate
its shape.
(This is the logistic curve, see 16.2 (3), Ex. 3 below.)
i
+e
17. The selling value of a good is /() after t years from the time when the
fixed cost of production of a was incurred. If /() represents lOOr per cent.
(reckoned continuously) on the outlay a, find r as a function of t. It is
assumed that the entrepreneur aims at maximising r. Show that the optimum
rt
storage period t and the (maximised) value of r are given by f(t)=ae and
Illustrate diagrammatically and contrast this problem with that
f'(t) = rf(t).
of 10.3.
18. The cost of planting a piece of land with timber is 272. The value of
the timber after t years is 100eiV*. Show that the present value of the
timber is greatest (the rate of interest being 5 per cent, compounded continuously) if it is cut after 25 years. Show also that the maximum return (reckoned
continuously) on outlay is 6J per cent, after 16 years. Hence illustrate the
difference between the problem of 10.3 and that of the previous example.
(Take
log,,
2-72
1.)
How
an individual .consumer
are
Elasticities
and
their applications
20. Show that the inverse function rule is of the same form for elasticities
as for derivatives. Verify the rule by finding the elasticities of e x and log x
separately.
x
x
21. Evaluate the elasticities of xe , xe~
and
yper*l*+*\
tt x \
(c
1)
23.
p = 3.
and"^
22. If
is
are
Find the
elasticity of
demand
TJ
when
the
demand law
is
20 -
and
Plot an accurate graph of the demand curve, draw the tangent at the
where p = 3 and locate the points T and t where it cuts the axes.
point
and
are perpenHence verify that vj^MT
Nt, where
diculars to the axes.
OM^ON
PM
PN
266
is
the price of corn and x bushels the yearly conit is found that
By
demand
for corn
25. The following table gives the average N.Y. price ( p cents per
the yearly consumption (x th. short tons) of sugar, U.S.A., 1904-6
Ib.)
and
Plot on a logarithmic diagram and draw three parallel lines, one through each
plotted point, so that the second line is equidistant from the other two. It is
assumed that the elasticity of demand for sugar is constant and that the
logarithmic demand line has shifted downwards by equal distances over the
three years. Estimate the elasticity of demand for sugar. (See Pigou, The
Statistical Derivation of Demand Curves, Economic Journal, 1930.)
26. If
A.R. and M.R. denote the average and marginal revenue at any
demand law p
A.rv.
M.rv.
at this output.
a-bx.
27. Find the elasticity of demand in terms of x for each of the demand
Show that 77 decreases as x
laws p *Ja -~bx, p (a- bx) 2 and p a- bx 2
.
increases
and
find
where
rj
28. If the demand law is x ae~ bp express demand elasticity and total,
average and marginal revenue as functions of x. Show that the demand is
of normal form. At what output is total revenue a maximum ?
,
29.
cost of
price
is
2
(^c + 3# +
jp
per
30. If the
100).
The demand
is
x-p a e~ b ^ +c \
sot.
demand law
is
increases as
the price decreases, becoming large as the price approaches the value
the elasticity of
demand
for
Is the
Find
j-
demand
of
normal form?
31. If a firm produces an output # at a total cost of II=ax* + bx, find an
expression for *, the elasticity of total cost. Show that K is always greater
than unity and increases as x increases.
LOGARITHMIC DERIVATION
267
32. Show that, for the total cost function 17= \fax -t- 6, the elasticity of total
cost increases but remains less than unity as x increases.
y b
Show that the
h d.
x+c
average and marginal cost curves are of normal form if rz, 6, c and d are
positive and if d< a(c b), the former having a minimum point and the latter
-4-
The
33.
is
ax
II
rising continuously.
34. If II =
positive
that
x.
ax z
x+
\-d is
-=
(
dx\x/
Show,
also, that -7
increases
ctx
6, c
and positive
and d are
cost as functions of x.
form
(see
Examples V,
Show
for large
increases.
22).
35.
The production
36.
greater than
6) is
CHAPTER XI
FUNCTIONS OF TWO OR MORE VARIABLES
11.1 Functions of
two
variables.
example, the volume of a gas depends on the pressure, on the temperature and on other factors. In economics, when an individual
considers his purchases on a market, the demand for any good
depends, not only on the price of the good, but also on his money
income and on the prices of related goods. Again, to quote an everyday example, the sum of money extracted by a London taxi-driver
and
y.
In this
case,
we
write
s=/te
A given
implicit function
y)'
rise to
three
269
Finally, the concepts of limits and continuity extend easily to the case of a singlevalued function of two variables. If, for example, the function
z=f(x
f(x, j/)->A
as
x>a
and
j/-~>6.
yb
if z takes the
continuous at the point xa,
definite value /(a, 6) at the point and if z tends to the same value as
The function
is
ax+by+cz+d=Q.
Each of the
is
single-valued.
Ex.
2.
The three
explicit functions
z=3xy;
and
"
"
homogeneous
z = ax 2 + 2hxy + by 2
.
quadratic type
For
270
In the
first
Ex.
The
3.
y= -x\/2x2 -z.
and
explicit function z
x2
x2 - xz + yz - z
and
=--
0,
#2
is
2
-f
2/
+z 2 = 16,
The
all
Ex.4.
illustrate
The
explicit functions
z=ex2 ~~v
z=log(x +y
2
)
and z=x2ev
appear in functions of
two
variables.
in space
"
origin
"
(OMx and
271
The whole
makes up what
is
The
FIG. 75.
generally, iff(x, y,
still
y.
To a
any surface
272
Such a model
is
the
Again, if a function type is defined with the aid of certain parameters (e.g. the type z=ax 2 + 2hxy + by z ), tl\gn there corresponds a
whole
Each
surface
class of surfaces
type
zax
surface.
"
plane sections
".
The
essentials of the
method
273
the most convenient are the horizontal sections by planes perpendicular to Oz and the vertical sections by planes perpendicular to
Oxy.
Each of these
sets of sections
y) is
plane.
Taking
Fio. 76.
set of curves in
of
z.
f(x, y)
= constant
by
at heights z = l, 2, 3 and 4.
circles with centre at the origin.
The contours
M.A.
274
is
steeper
are closer
z^
perpendicular to Oy
showing the variation of z
plane
as x changes only.
Such a
which is conveniently
projected on to the plane
"
"
Oxz is an
elevation
of
section,
W.E.
FIQ. 77.
already obtained.
surface
traced
z=x* + y
The curve of
for
by observing
The
direction.
section
how
1,
i.e.
Fig. 77
is
the parabola z
the line
AB
(t/
= l)
l+x 2
It
can be
z=f(x,b)
parameter b.
275
Ox
by
we
This idea of
11.4 Functions of
There
variables.
is little
concept and
variables
x, y, z
taken.
is
and u
is
An
is
variables x, y
and z, we
write, in general,
f(x, y,
z).
This notation
function
More
is
single-valued.
generally, a functional relation
/(#!,
Z 2 Z3
,
...
between n variables
X n )=0
- 1) variables. Or,
gives one variable as a function of the other (n
if a variable y is given as an explicit function of n independent
variables x l9
x 2 #3
,
...
xn then we write
,
y=f(*i, x 2
#3, ...x n ).
concerned.
practice
particular values of one variable.
Pure geometry as an abstract study
is
276
more dimensions
two or three dimensions, and the correspondence between the functions of analysis and the concepts of geometry
But actual
persists no matter how many variables are related.
or
are
no
diagrammatic
graphical representations
longer possible
when more than three variables are involved. We should need to
fix more than three axes intersecting at right angles and, unforas in
is
called a
"
"
point
n variables
%n)
n mutually
and a plane
(three dimen-
was seen
mena can be
(1.5
above) that many properties of scientific phenoby the measurable quantities with which our
described
We
in the use of
277
a function
remains
constant
or
decreases
=/(#, y) increases,
according to the
the
in
which
variable
crosses
the
contour
point (#, y)
way
map of the
function.
how close together the contours are as we cross them. But this
second and quantitative use of the contour map is quite independent
of the first use. It should be possible, therefore, to take a non-
ing
now
The magnitude
is, however, by no means unique.
can be represented just as well by any other variable number or
function which changes always in the same direction as z=f(x, y)
when x and y vary. For example, the variation of the magnitude
2
might be indicated by {f(x, y)} by e/tev) or by log /(a?, y). In
general, the dependence of the magnitude on the variables x and y
function which
can be expressed
=F(z)
i.e.
where
=/(*,
y),
=F{f(x,j/)}.
Here, z=f(x, y) denotes any one variable number which indicates the
278
y are at all kinds of heights, but they move up and down together as
x and y vary. In particular, if x and y vary so that the height of one
The
surface is unaltered, then the same is true of all surfaces.
all
have
different surfaces have one feature in common
they
;
The values of
identically the
contours of the
but this
map.
map
affects in
attached to the
t
t
F(z)
is
constant
if z is,
constant.
f(x, y)
= x2 + y2
= (x 2 + y 2
2
)
= ex*+v*
shown
in Fig. 76.
is
or
2
2
z=log(x + y )
constant
The value of
circles
The
problems concerned with non-measurable magnitudes.
here
can
be
of
to
cases
where
extended,
course,
development given
the magnitude depends on more than two measurable quantities.
in
been shown
(2.9
/i(*,2/)=0
is
y,
there
is
an
indefinitely large
279
is,
in general,
and f2 (x,y)=V
only a finite number of possible
pairs
"
of values ofx and y and the solution of the equations is then determinate ". The solution may be unique (as in the case of two linear
equations) or
it
may
quadratic equation).
be multiple
If
A(s, y)=0,
we
(as in
/,(*,
y)=0
and
/,(*, y)
first
co-ordinates of
any point of
and the
solution of the
between n variables.
(1)
Then
an
infinite
is
given
is
indeterminate
variables
280
is
If there are
all
is
no one
set of values
equations.
One
It
is
restriction
number of equations
in a given
the others.
When
determinate.*
The
(n-
1)
other (n - 2)
variables
Thus each
This case often arises in the analysis of economic equilibrium. See, for
example, Pareto, Manuel d'fconomie politique (2nd Ed. 1927), pp. 591-3 and
pp. 610-5; Bowley, The Mathematical Groundwork of Economics (1924),
pp. 20-2 and p. 51.
281
is less
will.
is left
x + y + z+uare
If,
by one
we have on
For example,
is
-x- y).
given
and y only
2x 5y 15 = 0.
I3x + 2xy + ly
From the system of three equations, two have been used to eliminate
two variables and the other gives an equation in the remaining
substitution an equation in the variables x
2
variables.
part in any* precise and general interpretation of economic phenomena. This fact has been implicitly recognised already when we
found that functions of one variable could only be applied when the
problems were simplified and abstraction made of the inter-relations
We
all
We
Zr = <t>r(Pl,P2>P3>
Pn)
r,
all
the variables.
282
It is
demands
all
= & (Pi>
two goods
for
and
x 2 ==
and
Then
by assuming
2 (p ly p 2
demand functions, each dependent on the two variable
prices. Each function can be shown as a demand surface with heights
above the horizontal plane Op^ 2 representing the varying demand
for the good. The vertical sections of such a surface are particularly
= l (pl ^2) by any plane
interesting. The section of the surface x 1
*i
Pz)
<f>
are the
<f>
ward sloping
in the
normal
The
case.
by a
ranges of the prices, that the demand functions are of definite types.
The following are examples of demand functions of relatively simple
a?i=o 1 -o 11 ft+a 12 y a
(3)
xl = ax
(4)
xl
X2 =a 2 + a 2l pl -a 22 p 2
P2+<*>22
A -H pf*
p{~
a^
x2 = a 2 pf
a
e " p* +ai ,
x 2 =p 2
~a
positive
if
It can
283
be noticed that the demand functions (3) and (4) become linear if
the demands and either both or one of the prices are taken on
logarithmic scales.
for a
good X
If a
a function
r is
%r
= <l>r(p>,Pl,P2,P3,
-..Pn)-
= ^r(^Pr),
showing the demands for X r for various incomes and prices. The
section of the surface by a plane perpendicular to Op is an ordinary
demand curve
for a fixed
income
level.
As the income
level is
On
variation of
demand
,x 2 x 3 ...xn ),
where xl9 x 2 x 3 ... x n are the amounts of the goods Xlt X 2 X 3 ... X n
produced. If only two goods X and Y are produced, the cost
n=F(x
cases.
particular
284
The transformation
in
X X
if
Xn
F(xly x 2 # 3
,
...# n )
= 0.
For, given the outputs desired of all goods but one, or the incomes
desired in all years but one, then technical considerations determine
the amount of the remaining output or income. When there are
we have a transformation
surface
F(x,y,z)=0
referred to axes Ox,
A simple
ax 2 + by z + cz 2 = d,
where
a, 6, c
and d are
positive constants.
employed, we can
and that the productive process is continuously variable. The production function
It is to be
is then a continuous function of continuous variables.
factors of production are continuously divisible
noticed that our presentation of the problem does not exclude the
* See 10.8 above.
285
of production.
all cases,
variable.
of the factors.
method of plane
f(a, 6)
= constant.
*=/(!
W=
^L(O),
a=/(a,
&.)
= #2(0),
are the equations of the vertical sections for fixed amounts b l9 b^ ...
"
"
of the production
elevations
of the factor B. They are diiferent
"
"
elevations
is obtained by
similar set of sections or
surface.
and 06, and they show curves giving the variation of product
as the
l9
variable proportion.
section
is
In the
"
normal
"
FIG. 78.
apply only to certain ranges of employment of the factors while, outside these ranges, product is maintained only by increasing the use
*
This
is
13.7 below).
the principle of
"
"
(see
287
is
then that shown in Fig. 78. In the area of Oab between the curves
OA and OS, the curves are downward sloping and convex to the
origin
outside this area, the curves turn back and slope upwards.
factor is used in much greater proportion than the
an increase
factor
FIG. 79.
form shown
Each
section has a
"
"
peak
288
"
"
it
The
factor
type
is
where a
is
A
b
A>
=^>
JL
*
and
where A'=[-?}
\AJ
mA'
db
1-a
and
constants.
So
d 2 b_
and the constant product curves are downward sloping and convex
to the origin at all points. In the particular case where a
the
|
curves are rectangular hyperbolas with Oa and Ob as asymptotes.
x=A"a;
amount
b of the factor
B is
(A'^AbS-).
Since a
is
log x = log
On
A + a log a + (1 - a) log 6.
all variables,
2
where A, B and
are positive constants such that
>AB. It can
be shown that the constant product curves are of the form of Fig. 78
is
described
by Knight, Risk,
OA
with
and
OB
which
x=
i.e.
i.e.
Z72
Examples XIII,
289
32).
The
b has equation
-j
than
2
(H - \/H - AB)
or greater than
factor, the
~
A.
product
rises
from zeio
*>
1500
WO
24
16
16
24
men-hours
FIG. 80.
to a peak
again.
Fig. 80
in
than 400 men-hours are employed and that the wheat product
rises to a maximum of 640 bushels when 1200 men-hours are emless
ployed.
The
11.9
An
utility function
and
indifference curves.
two conM.A.
290
Burners'
goods
5.7 above,
by
and
= constant.
u = <f>(x, y),
(#> y)
Denote
indifference curve
indifference curves.
or worse
an indicator of utility and can be termed the general indexfunction of utility.* It is quite immaterial which utility function,
serves as
u = </>(x,
e.g.
y),
ence of
to axes of which
Ou is vertical,
indifference
and
map
fall
together
of the indi-
The problem
is
generalised
X X X
<f>(xl9
x 29 x3
...
individual has
...
Xn appearing
map
xn ) = constant.
For a given value of the constant, this relation connects all purchases
which are indifferent to the individual while, for increasing values of
the constant, we move from one set of indifferent purchases to
another set at a higher level of preference.
Y and
Z, the indifference
map
is
represented
downward
291
by a system of
fit
origin.
is
possible,
map
where
(u)
> 0.
. . .
xn )
is
and we
Xi9 x zi x &
xn)
constant,
where
common
to
all
utility function, is
= 2, 6 = 1. It
Fig. 25 in the case where oc=p~l and a
A
rather
different
of normal form.
utility function
is
shown
in
seen to be
u =ax + by + c*/xy
normal case of an indifference map for two
Any monotonic increasing function of u, such as
also corresponds to a
goods or incomes.
and =
/2.
map
is
as an index of utility.
shown in Fig. 26 in the
The corresponding
case where a =6
=1
292
EXAMPLES XI
Functions of two or more variables
the function z =
Express
*
1.
--
Xt/
-
in implicit
is
2. Illustrate graphically the form of the contours, and of the other sections,
of the surface z = *Jxy.
that the sections of the surface x + y + 2z = 3 by planes perpenparallel straight lines and deduce that the surface is a
plane. Locate the points where the plane cuts the axes. Generalise to show
that ax + by -f- cz + d = is always the equation of a plane.
Show
3.
dicular to
an axis are
Examine the
4.
a sphere of radius
Show that x 2 4- y* - z 2 =
5.
it is
a.
is
axis
its
along Oz.
Show
6.
a system of
By a geometrical
7.
mid -point
form
circles
construction,
>
(x 2 ,
yz
*s
"o"/
tno
z 2 ) referred to
Show
on# + + z+l
2/
of a plane.
8. If (x l9 y l9 zj and (x 2 y z z 2 ) are two given points referred to rectangular
axes in space, show that the distance between the points is
,
y,)
(*!-*,).
2
1/
6, c)
and radius
is
+ z2 -
2z
is
such that
its
Show that
a
2
z=/(fl5 + 2/ ) is a surface obtained by revolving the curve
about the axis Oz in the plane Oxz. Illustrate by considering the
surfaces z = a? 2 y*, z = e&+& and z = log (a: 2 + y 2 ).
11.
f(x
-f-
12. If z =
xt
x-y
show that
z ->
oo
as x ->a
"
"
Deduce that the surface represented by the equation has infinities at all
Check
from
the
vertical
in
the
the
line
Q
above
Oxy.
plane
x-y
points
sections of the surface.
293
14.
Show that,
= Vic 2 - y* and
-f-
the value of z changes from z to Az when the values of a; and y are changed in
proportion from x to A# and from t/ to \y. Deduce that the surface representing any of these functions has a straight lino section by a vertical plane
and a given point on the surface.
through
15.
where
= X(/>(r),
/v
aj
,
and that
= y$(s), where s =
16. If <f(x) and if*(y) are two functions of single variables, show that the
sections of the surface z
^(x) + ^(y) by planes perpendicular to Ox or Oy are
of the same shape but variable height, and that similar sections of the surface
"
"
"
"
contracted
stretched
or
by a variable
z~(/>(x)*fi(y) consist of a curve
amount in the direction Oz.
+ z 2 has con-
4x*y*
+ z*- u*+ 1 =
z is
nr\
ftf)
22.
The demand
for tea
and
40
is x,
for coffee
# a = 10
thousand
At what relative
Draw a graph to show the
per
Ib.
Show that x = a t
coffee in
pence
and
prices of tea
and a?t
eP*
and #.=
PiP*
Ibs.
P*
Pi
per week, where p l and p^ are the respective prices of tea and
when
and
and that
e-ft
Pi
2
are complementary.
demand
294
24.
p l and p 2 are
related
by
a? 2
the condition
where the
a's
and
the
6's
demands
~
25. It is known that x = Aa a b l a is the product (in bushels) of wheat when
lOOa men-hours of labour are employed on b acres of land. Find the constants
A and a, given that 1500 bushels can be obtained from 100 acres when 10,000
men-hours of labour are employed and that 2120 bushels can be obtained from
the same area when 20,000 men -hours of labour are employed. Draw a graph
of the variation of product as varying amounts of labour are applied to 100
acres. What is the product when 20,000 men-hours of labour are employed
on 150 acres?
26. The production function is x AaP-W, where A, a and ]8 are constants.
If the factors are increased in proportion, show that the product increases in
greater or less proportion according as (a + jS) is greater or less than unity.
is this property shown on a vortical section of the production surface
through O and a given point on tho surface ? What is the special property of
tho case a 1 - j8?
How
27.
The
Find the value of x given each year by the production function x d*b* and
express as a percentage of the actual value of x. Show that the deviation
never exceeds 10 per cent, and find the average percentage deviation (neglecting signs). Plot a graph on a logarithmic scale of the variation of the actual
and estimated values of x over the whole period.
given that x = 40
is
FUNCTIONS OF
295
_2Hab
X~
- Aa* - Bb*
Ca + Db
an equal pro-
Show
gives
an
a and
utility function
indifference
6,
32.
-c
- Vy + b
where
a, 6
and
c are positive
constants, and show that tho indifference map is a set of parabolic arcs
of normal form for certain ranges of values of the purchases x and y.
and
CHAPTER
XII
two
variables.
"
"
of the function z=f(x, y), the term
partial
implying that
of
the
for
variations
defined
are
very special
independent
only
they
variables. One partial derivative follows when x is varied and y kept
tives
"
partial derivative
is
33
=
^ox /(#>
2/)>
r as z x
and the
~fx ( x
>
y)-
indicate that
"
"
d
the other variable y is regarded as fixed), we use the symbol
"
"
d in the first notation and add a suffix x
instead of the previous
in the second notation.
An
DEFINITION
at the point
The
(x, y) is
partial derivative
Hence
ofz=f(x,
y)
with respect to x
It
is
-,
,,
-r
f(x,
-\-
same point
k)
is
f(x, y)
Clf
297
For
Further,
when
FIG. 81.
f(x, y) defined
(x, y).
Hence,
is
c/x
to be interpreted
or,
more
same way,
298
the value of
at
(x, y)
dy
at
PTy
the tangent
The
and
partial derivatives
Hence
and Ox
respectively.
It
One
must be
stressed.
The value of
at a
uX
point (x, y) depends, not only on the value of x from which we start
in the limiting variation defining the partial derivative, but also on
The
is
i.e.
when
Similar
The
can be expressed
If z
is
It
is
a single-valued
y,
then
299
z is
derivatives
In particular,
^
if
___
dx
du dx
w^rw
is
11
ox
dz
_
dz du
dz
.,
ji
n fi
~~
dy
dz du
du dy
- 1 du
&
ox
= eu
dx
<^
ox
j
and
y,
*
we have
ox log^-uox
Ex.1.
~(2tf-3y + l)=2;
Ex.2.
Ex.
3.
^.(2a;-3y
y
^-(ax
+ by + c)=-a\
r(ax* + 2hxy + by
j^(x*+2xy-y*)=2(x-y).
coefficients a, b,
+ l)
-a; 8 _a;(a:-2y+2)
dy\x-y +
EX.5.
6.
c, ...
-=-(
2a;(a;-y
Ex.
+ l)= -3.
oa;
ay
300
Ex.
If
7.
z=x*v #-2/
then
+\
log(#
log z
=2
Idz
--
2x+y
log x
+ y) - 1
log (x -y).
11
2x 2 -xy-2y*
~~
2x -y
x (x2 - y 2 )
dz ~ x(2x*-xy-2y*)
i.e.
-p-
~=
Similarly
oy
definition of the partial elasticities of a function of two
variables z =f(x y) is similar to that of the elasticity of a function of one
Ex.
The
8.
variable
Ez__xdz_d(logz)
Ex~~zdx~d(logx)
So, if
zx y^
a
where a and
Ez ydz_d(logz)
Ey~ zdy~ d(logy)'
ft
Ez =
and
-=-
Ez =
and
-=.-
^a:
The two
p.
jEJy
and higher
orders.
zf(x,
y) are
themselves
functions of x
and
partial derivatives of
z, i.e.
~
dx*
dx \dx
'
Alternatively,
By dx
if //(a;, y)
dx \dy
dx~dy
&ndfy '(x,
y)
~~
~~
'
dy \dx
dy*
denote the
dy \dy
(first-order) partial
or,
more
shortly, as
fxx>
fvx',
fxv
and fyv
9 2z
derivations
are
carried
out.
Thus,
=/^ (x,
y)
=/
ya?
is
the
is
and
"
cross
"
301
first
partial derivatives
are quite
distinct in meaning
priori
^
& and there is no a ^
dxdy
reason to assume that they have the same value at any point. A
"
"
result can be established, however, stating that the two
cross
dydx
partial derivatives are identical in value, provided that certain conditions relating to the continuity of the function are satisfied.*
known
This result,
it is
verified
dx dy
dy dx
The
Ex.
32 /
From
1.
a;
d (
^-
x*
d /
+ 2)
^-~
~
= x(x-2y
we
2
(x-y + 1)
derive
1
~~
(x
y+
1)
- xz
(x-y + 1)*
x2
srjr
-l
dxdy\x-y + l/
,
'
- y + 1) 4
~ =
From ^^2 we
dy\x-y + lJ (x-y + l)
(
(x
dy dx \x y + 1/
x*
)
dx\x-y + \J
\_
~
dx 2 \x - y + 1)
d*
,
'
derive
(x-y + l
2x(y-l)
(x-y
See Courant, Differential and Integral Calculus, Vol. II (1936), pp. 56-7.
302
Ex.2.
Since
llo(^ +
and
wehave
2y
" Zx ~
los^
X + ^-2*/
10
Ex.
The
3.
<f>(x,
y) are
<f>
and
<f>
y.
It
is
<f>
<f>
^
and
9 (I*
T5
^r
first
and
xv
The
<t>v<l>xx
<f>x<tfr
<
and
<t>x<l> V v
<f>
v <f>
We
we have
and we
shall
and
seldom
* The
problem is taken from Pareto, Manuel d'iconomie politique (2nd Ed.
1927), p. 676, where the mathematical steps given here are omitted. The
function <f>(x t y) is a utility function of an individual for two goods
and Y.
12.3
The
303
partial derivatives.
shows that
-r-
dx
and
must
dy
We
(1)
If
^->0
at the point
(a, 6),
xa and y =
If
ox
<0
at the point
the surface
The
(a, 6),
the direction
falls in
b.
named
above.
xa
There remain,
below), the cases where one or
directions.
"
The values of the two
direct
"
d 2z
derivative
-^-^2
dx
The
partial
dz
remains constant.
of change of the
In diagrammatic terms,
surface z=f(x, y) as
we move
304
from the point concerned in the same W.E. direction, i.e. it determines the curvature of the surface in the W.E. direction. So
:
d z
(1)
If
at the point
^->0
uX
(a, 6),
(a, 6).
3 z
(2) If
ox
TJ
<
at the jpoint
(a, 6),
is
direction
The
dzz
and sign of -.
is
exactly similar.
y
It
is
more
difficult to interpret
"
cross
"
second-
order *
partial derivative.
The value of
9 z
.
as y increases
both the rate of change of
OX
and the
at
(x
remaining constant)
dxdy
dz
rate of change of -- as
x increases
(y
remaining constant).
way
in
which the
we move
in the
W.E.
d 2z
direction.
So, if
is
positive at a point
dxdy
on the surface, the W.E. gradient increases as we move N. from P
and the S.N. gradient of the surface increases as we move E. from P.
It is difficult to visualise this state of affairs. For example, if the
surface rises to the right and falls to the left as we look N. from P,
9 2z
more rapidly to the right and to fall more steeply to the left as we
actually move N. from P. The S.N. path on the surface through P
moves on an
if
is
negative at P.
and
left.
The
These properties of
the surface are quite different from, and independent of, the separate
curvatures of the surface in the W.E. and S.N. directions.
305
The various
function
"
fundamental
"
B 2z
B 2z
and ^
^dx 2
are positive
ay*
The results obtained above clearly extend to allow for the cases
where any or all of the variables are measured on logarithmic,
instead of on natural, scales. For example,
d(logz)_l dz
zdx
dx
measures the rate of proportional change of z=f(x, y) for actual
changes in x (y constant) and is shown by the W.E. gradient of the
surface obtained when z is taken on a logarithmic and x and y on
natural scales.
Ez_d(logz)_xdz
Ex
d (log x)
dx
z for proportional
changes in x
is
scales.
12.4
to
a surface.
we
Geometrical
expect, by a linear equation in three variables.
considerations (similar to those of 3.1 above) establish the simple
M.A.
306
result that, if
(#2> #2> ^2)
two points
in space
have co-ordinates
(a^,
(whatever
its
a, 6, c
>
"Hi~"
2 /)
Suppose,
>
Then
and
i.e.
yly zj and
1
(
where
(xl9
2,
a# 2
we
find
the mid-point of the two selected points also lies on the surface.
is true of any selected pair of points on the surface and it follows
This
FIG. 82.
that the latter must be a plane. The general linear equation in three
variables thus represents a plane. The actual location in space of
ax=d.
So
a
Similarly
and
06'
307
= -.
c
The cases where one (or more) of the constants a, b and c has a zero
value clearly correspond to planes parallel to one of the axes.
A plane is given as passing through the fixed point (xl9 y^ zj.
If the equation of the plane
then
is
axi
It follows that
+ byl
-t-
czl
d.
appears
or
-i=-7(-i)-r(y-i)
G
Lf
dz
TT
Hence
dsc
and
dz
= --b
oy
are the gradients of the plane (referred to the horizontal plane Oxy)
in the two fundamental directions perpendicular to Oy and to Ox
respectively.
The
following result
is
thus obtained
(xl9
yl9 zj
possible to vary the position of the plane so that the part of the
encloses a smaller and smaller area and finally
section including
tends to close down on
itself, then the limiting position of the plane
is
and
its
tangent plane
is
perpendicular
The possibilities are rather more complicated than this brief statement
indicates. It may happen, of course, that no such limiting plane exists at all
and the surface may have no tangent plane at a point where there is a " sharp
"
"
"
point or an edge of the surface. Further, it may happen that the section
tends, not to a point, but to a straight line through P. The limiting plane is
then a tangent plane touching the surface at all points on the straight lino
through P. In any case, it should be noticed that the section of the surface
by the tangent plane can consist of a curve as well as the isolated point P.
Only one part of the section need close down on the point P.
308
We
to Oy.
obtain, from the surface, the curved path in the W.E.
direction and, from the tangent plane, the tangent
X to the path
PT
P (see Fig. 81). It follows that the tangent plane, containing the
line PT X has gradient in the direction of the plane perpendicular to
at
dz
at P.
value of -- at P.
dy
If the point
has co-ordinates
is
given by the
(x lt
can be denoted
So:
This
is
f(x, y)
-~-2x
The tangent plane
is
ylt
z,)
on the
z=x 2 + y*
gives
= 2y.
dy
dz
and
ox
.e.
(x1;
is
= 2xxt + 2yVl + zl -
must
lie
x^ + y^ and
zl
An
now be
deduced.
If
^-
and
are both
dz
dz
~
and ~ are both
309
both
both
The
variables.
functions of
is
du
du
r
(/x
TT-
an d
oy
du
-jr
oz
--
of the junction at
du
OX
f(x
+ h,
any point
y,
z)-f(x,
=
y, z)
fl
the six
A ^
and
three
cross
4-1
J
*'
partial derivatives
*
( d U
I
\dxdy
The
S U
-^
dydz
*
A
and
^U
^-1.
dzdx/
an
we
by
dy_
dx1
Each corresponds
dy
dx 2
'
'" jty
to the variation of
'
dxn
310
and \n(n-
The
once.
"
1)
cross
"
is
immaterial.
partial derivatives
Thus,
if
is
uX
(a, 6, c),
then the
Economic
r is
a function of
all
r
market
prices
partial derivative
market demand
for
any
= ^r(A^, -Pn)
derivatives
(r
= l,
2,
... tt).
dp r
case,
for
decreases as
its
its price
xr dp r
This expression, independent of
rate of proportional decrease of
demand
demand
in price.
It is
demand
obtained when
prices change, the whole demand law shifts and the elasticity must
be evaluated anew. But our generalised demand law and the
demand
elasticity
shifts in
demand.
but also of
any of the
The
-r\
obtained from
rr
In
other prices
all
fact, rj rr is
;
prices change.
dx
r
partial derivative
Ps
price of another
good
is
increased,
and
it
is
dx
for increases
dp r
in the price of
demand
for
The goods
increases with the price of
s are then
r
r and
competitive, using this term in a broad sense. If both partial derivatives are negative, the
demand
for one
opposite to that of the price of the other good and the goods can be
It is often
called, in the same broad way, complementary goods.*
convenient, again, to use the elasticity forms
3 (log ay)
p s dx r
d(logx 8 )
i.e.
demand
elasticities
i?n=0ii;r;
#!
and
all
of
demand
i?i=-0ii$;
Xl
depend on the
prices
for
and X%
are linear
are
^n=-n?
X
assumed
p r dx 8
and
for
?22=22^
X2
both goods.
There remains the possibility that the partial derivatives are of opposite
In this case, the goods, on the present definition, are neither competitive
nor complementary. See Schultz, Interrelations of Demand, Journal of
signs.
Political
Economy,
1933,
and
19.7 below.
312
On
then
we have
if
the
demand laws
linear relations
when
all
It
is
= an
112
- ^12
^21
two
- <%
elasticities
and
of
7/22
= a 22
demand
for one
good
with respect to the price of the other are of the same sign, in each of
the above cases, only if a12 and a 21 are of the same sign.
The production function x=f(alt a 2 a 3 ... an ) shows the dependon the amounts of the variable
ence of the output of a good
factors AI, A 2 A^, ... A n used in the production. Suppose that a
,
and
dx
da
A. P.
a
FIG. 83.
ai
(the
average product
and the
AJ
factor
dx
the marginal product
partial derivative
oa^
of the factor
A^ at the combination
(al5
2,
a3
...
The
an ).
is
latter
increased,
xf(a
b).
The
by the plane
313
by the gradient
(to
production (see 11.8 above), the section, which can be called the
product curve for the factor A, takes the form shown in the first
diagram of Fig.
83.
now be
constructed
showing the variation of average and marginal products (see Fig. 83).
Average product increases to a maximum at a definite point a~a 2
where the tangent to the product curve passes through the origin.
x^2Hab-Aa*-Bb*
T
h2
~ = 2Hb-Aa-Ba
a
then
So
da \a/
(H*>AB),
dr
~ = 2(Hb -Aa).
and
da
a3
oa* \aj
a*
VgA
~~
b l9
is
average product of
J?,
products are then equal to 2(H jAB)h^. In this case, the opti"
mum use of the factor A and the maximised average product
TT
mum. The
form of Fig.
If
u=
cf>
(#!,
x 2y #3
...
xn )
is
,,
,.
x.
X X X
2,
19
du
derivatives =
that the partial
r
dxl
du
,
dx 2
3 , ...
du
dx 3
utility
might appear
du
it
n)
. . .
dxn
the
represent
r
314
"
marginal
"
utilities
x 2 xs
,
xn ). For example,
...
measures the
(/X-^
general
by
where F(u) is any function such that F'(u)>0. Can any meaning
"
be attached, therefore, to increments of utility and so to marginal
"
?
We have
utility
i.e.
marginal
definiteness
utilities
when
d
utility is
t
'
t
'
dx
dx z
dU_duLf
.....
du_
'
dx
dxn
dx$
du
3u
u
t
'
dx z
.....
dx s
dxn
and the ratios of the marginal utilities are definite concepts quite
independent of the non-measurability of utility. This fact will be
developed in the following chapter (13.7 below).
Suppose, for example, that one form of the utility function
and
are considered
by the
is
individual.
Then
^
<_. \tns
\if
ox
i
du'
dx
The
du du -_-
________
dx' dy
x+a y+b
,_
oy
'Q
whence
cllHU
vx
a
'
_______
utility function is
a
x +a
du'
and
-r
ay
ratio of marginal
utilities,
B
--=-
y + b'
j8L
.-
y+b
is
thus *
perfectly
J definite
Homogeneous
315
functions.
When
be in greater, in equal or in less proportion. In the very special case where zf(x, y) increases or decreases always in the same proportion as x and y, the function is said
in the function
zf(x,
y)
may
to be
linear
(1)
and homogeneous
z=ax + by,
(3) Z
where the
+ 2kXy + W,
coefficients, a, 6, c,
...
(2)
z~
(4)
and
homogeneous surface
lies
The
surface
is
316
The
sections of a linear
If
is
a point
and vary
"
of any other and the whole
projection
system of contours can be derived given any one contour. Further,
the tangents to the various contours at points where they are cut by
Any one
contour
is
a radial
any point
(x, y)
For example,
j~
y)
is
2
2
homogeneous of zero degree, z=ax + 2hxy + by is homogeneous of
a
p
the second degree and z = ax y is homogeneous of degree (a-f/J).
The diagrammatic
and a given
quadratic homogeneous surface by a plane through
is always a parabola with vertex at
the
on
surface
and axis
point
of
the
The
surface
are
radial
contours
Oz.
along
projections of each
other and vary in size according to the square roots of the values of z
317
The
for
any point
(xly
x z x3
,
and
...)
for
y.
properties of
homogeneous functions.
(1)
whatever
z~s
where
(2)
The
<f>
and
some functions of a
are
Euler's Theorem
(4)
The
dx
-f
dx
x to y only.
(3)
and
---
partial derivatives
y =-
single variable.
z.
By
dx 2
The
y d z
x dx dy
dy
x d 2z
y dx dy
Since
/(A#,
/
we have
\
i.e.
since
d 2z
and
Xy)=Xf(x
y\
x)
y)
any value of
!
for
fix.
y}
^
xj
for A = -
( 1,
-1
x/
is
a function of - only.
x
Similarly, for
A=~
y
A,
318
where
/
<f>'
Hence, both
is
and
ox
oy
with respect to x
Further,
Euler's Theorem.
(-]
x<f)
-) with respect to x
which
x~ +y^~
is
Theorem
identically equal to
z.
This identity
is
maintained
dz
dz
***
*N
d*z
I
ox
"
>
ox 2
d 2z
dz
<>
ox
*\
iJ
dz\
ox oy
-\
*.xy.
dz
d*z
_
ox 2
x ox oy
y.
wide application
(see, e.g.,
Hence
-r-(
dx
a2 + 2 ~
But
3ic
as can be verified at x
or
x = 2.
and x
2.
Hence
319
y)
has equation
dz\
It passes
on a
Theorem
Euler's
linear
dz\
x~y = z=
if
satisfies
homogeneous
is
the equati
surface.
through the origin at all points, a fact which agrees with the ruled
surface property of linear homogeneous surfaces.
The four properties generalise to the case of a function z=f(x, y)
which is homogeneous of degree r
:
(2)
and
ox
homogeneous of degree
are
oy
(r
I).
oz
z
/\
+ y~^rz.
(3) x
ox
oy
d 2z
The
by
which
is
dz
dz\
dx\dx
dy/
d*z
i.e.
dx
a-
-i
is
Similarly
J
x
dx dy
dz
'
dx
d*z
dz
dxdy
dx
+y
- (r -
*w=
dy*
(r
ix
1
l))
w
-
dy
x and
320
12.9
The
is
characterised
by the
We
where only the relative amounts of the factors used is important and
not the actual scale of production. For example, if wheat is produced
with land and labour under constant returns to
scale,
product is (e.g.) doubled when twice the number of men are employed
on twice the area of land. Further, the product of wheat per man
or per acre depends only on the number of men employed per acre,
as does the marginal product of wheat per man or acre.
In the case of two factors A and B and constant returns to scale,
is
The
case of Fig. 79, the maximum points all lie on a straight line through
increases, the maximum
0, i.e. as the amount used of the factor
321
dx
da
dx
+b^dbl
= gradient
of
PQ =
RP = RP
-=j.
dx
i.e.
a =-
= JSP.
So
da
db
M
FIG. 84.
The
total product
point
is
divided,
and so
MP
oor
-
MR = b db and RP = a~da
total product is a
maximum,
or
= j>
At such a
At the
=
da
is
maximum on
the point
fy*
maximum.
M.A.
322
The
following are simple examples of linear homogeneous production functions corresponding to constant returns to scale
:
(H
In each
'i\
- and
and the marginal products
|n
uI
(xd
f
and
-^7 j
Case
(1)
i.e.
ratio of
and
(2)
EXAMPLES XII
Partial derivatives
1.
Find the
and second-order
first
functions x -f y* - 3xy
===.
v# 2 + y*
~
ex y
is
and log
x
-x
+y
Verify Young's
Theorem
2.
3.
4.
By logarithmic
elasticities
- -
(x-y)(x-2y)
5.
+ y)
^-{(a?
X2
x-y
and
V}
= (x ~ y + 2r ~ n
its partial
derivatives of
*+ {(x
that z
+ y)4**} = (x + y + n)(x
Show that
Show
3n
and that
6.
e*+v}
y)
y,
all
orders
become
show that
= log u.
Evaluate the
first
and second-order
u
and
(x
partial derivatives of
+ 2xy-y z )ez
10.
is
immaterial.
Show
>0
323
concave
is
directions.
12.
ox
and
Find the equation of the plane passing through the points with co- 1, 0, 4), and (1, 2, 1) referred to
(2, 1, 0), (
rectangular axes.
ordinates
Where does
Show
xy + yx v -
2zz 1
~ 0.
surface z
Where does
it
(2,
1,
Deduce that
and
y=
2)
on the
z decreases
1.
Homogeneous functions
16. Graph the contours of the surface z
show that the latter is radially double the
\xy given by
Show
18.
Show
x</> (
Obtain
').
dx
21.
^3
z
4 and
/>2
A/2
form a system of
and
--
and
so verify Euler's
= *Jxy.
6 2 2/) 1 ~ a and
z
Show that z (a t x + b^y) (a 2 x 4a^iy^--^ -f a^x^y^-^ are
and homogeneous and verify Euler's Theorem in each case.
-j/3
_L
verify
* that x
22.
and
Theorem
20.
linear
dx
+y
dy
z
= axayP, show
x*
2
- xy +
2y and
= 2z.
that
324
23. If 2 is
...
sidenng
6
24. If
x+y
2x*
f(x lt # a x 9 ,
...
xn )
is
_
-r-
V'
.
Verify
J
26. If
'
'"
"*
r,
is
by con-
show that
'
homogeneous of degree
a? n \
fx
_2* x
_a
ft.
ydx
dy
is
</>
tives are
and
rft
~=
show that
2t/
+ xy + y*
2/1 T
at
where
x* - xy -f
-
- and z =
= log& x-y
-^-^
.
zero,
... a? n ,
partial deriva-
show that
26. Show that the relation between the second-order partial derivatives of
a function of n variables, homogeneous of degree r, is
derivatives
27. If the demand laws for two goods are given by (4) of 11.7, show that
"
"
direct
the
price elasticities of demand are independent of the prices
"
"
cross
while the
price elasticities are determined in sign by the constants
a 12 and a al respectively.
28. The employment of lOOa men-hours on b acres of land gives
x~2(l2ab- 5a 8 - 46 8 bushels of wheat. Graph the average and marginal
product curves for labour when 10 acres are cultivated. Compare with the
)
on
Draw
(a) 10 acres
and
(6)
100 acres
when x =
40
a
a
?(12ab - 5a - 46 )
is
the
wheat product
-- -
-\-JLJo
show that the average and marginal products of the factors depend only on
the ratio of the factors and verify that the product is always a times the
marginal product of A plus b times the marginal product of B.
31.
The production function x - */2Hab - Aa 2 Bb 2 is linear and homoshow that the maximum value of the average product of A is a
geneous
/Tyg
constant A/
A j>
325
33. If
and
da
~
If x = Aaa b l atP,
-r- ?
db
dt
fractions,
show that there are constant returns to land and labour after a fixed time t
and that, for given employments of land and labour, the timber product
but in a decreasing proportion, as time goes on.
increases,
Find the
34.
36. If
-
(a)
36. If
X,
and
F(u)
Z,
is
when F(u) = u;
=
u=
...
<f>
(x, y, z,
if
and
. . .
(b)
utility
obtained when
axy,
show that
(c)
-->0,
is
U = F(u)
is
is
similarly for the other second -order partial derivatives. Deduce that the
sign of each of these derivatives varies, in general, with the choice of the
arbitrary function F. Illustrate with tho results of the previous example.
CHAPTER
XIII
THERE
variables.
point x
(y
Hence,
if
A xz
Ax
in the variable
AgZ=~ Ax
approximately.
A vz
~Ay
approximately.
But these
are only two special ways in which the value of the function
can change and there remains the important problem of expressing
the variation of the function when the independent variables vary
together in any way whatever. A single partial derivative is not
sufficient here and an addition to our mathematical equipment is
needed.
It is
If h
y) possesses
continuous
327
(x, y),
the corre-
h
But, from the definition of a partial derivative,
-.
OX
fl
as
since the partial derivative
--
fl
is
continuous.
d ,,
- ---/(*,
uX
It follows that
_
y)
+ *, where e^O
as A
and &->0.
Again,
where
,-0
t-,0.
Jz~ U" + e ^+ (^ + ^j
)
where
and
7^->0 as h
and &->0.
expressions and 77 must be small when both h and & are small.
So, changing the notation for the increments in x and y, we have
The
small increments
dx
This
is
a result of the
x varies alone
is
first
-.
dy
importance.
The increment
represented approximately
in z
when
by ox Ax and the
Ay.
It
is
now
when x and y vary together is expressed approximately by the sum of the two increments in the simple
328
The two
directions.
variation
and a technique
"
"
for operating
Our fundamental
/(a + *,6
"
differentiation
The
"
are
a variant form as
b)
Hence
inserted in f(x, y)
then the error in the value of the function
if
is
approximately
hfx '(a,b)+kfy '(a,b).
Again, putting x a + h, y b + k, we have
- a) x '(a, b) +
- 6) y '(a, b)
(y
f(*> V) =-/(, b) + (x
f
f
are
when
and
small.
This result
(x-a)
(y-b)
approximately
enables us to replace f(x, y) by an approximate linear expression in
x and y for small ranges of values about the values x a, y~b
(cf.
13.2
6.4 above).
The
differential of
increments
to
two
of the same
ay
when Ax amd Ay
DEFINITION
The
differential of
az =
(x, y) is
dz A
dz
^r Ax+-~
dx
Ay
y
9
'
dy
329
the differential of the independent variable x. Simiwritten dy and called the differential of y. The differ-
call it
Ay
is
differentials
dZ
dz =
7
7
ax
It
^-
-f-
9#
ay.
9/y
are
An
The
>
--/x'fa >
2/)
is
f(x y)
9
* +/
?/) <fy =/x
y) *B -h/V fa,
dy.
the definition.
zf(x.
dz
y) is
dz
^dy
dy
that
implies
r
approximately
Az^---Ax + ~-Ay
dx
dy
Az
allotted to
much
in
x and
the same
y.
The
way
differ-
that the
negative).
The expression dz
dx +
^ dy
partial differentials.
When
is
dz
-
dx
dx
and the
(y
partial derivative
is
dx
derivative
^y
is
330
dy=f'(x)dx
an arbitrary increment dx in #,* This implies simply that
Ay~f'(x)Ax approximately
when the
The notation
dij
-
is
dx
now very
a derivative or as a ratio of
useful since
it
The
differentials.
differential notation,
The technique of
differentiation.
The
more convenient.
It
dy.
and
by
If u and
v are
XT
v)=du
7 /
d(u
Further,
if
dv
z=f(u) where u
d (un ) = nu*~ l du
fU \
a I-
a function of x and
is
udv -\-vdu
d(uv)
obeyed by derivatives.
then
y,
dz
So
are often
dy
= V dU
y,
~
-
then
f'(u)du.
d (eu )
eu
dii
du\
d (log u)
= --
ox
dy
du\ 7
d (uv) = ^- (uv) dx +
(uv) dy
/
dv
du
dX
(dv
Idu ,
du , \
dv - \
,
u (dv
^-dx +
dy +v \-z-dx +
dy]
y ~
\
\dx
dy
\dx
dy
Again,
z=f(u), then
.du
dz
dx
.
dz
dz = r-dx
dx
7
and
331
=f'(u)
J
9z
dx
dy
...
+ =-dy =Jf
/du
(u)
du
dz
and
=f(u) =-
=-dx +
\dx
dy
By
9%
...
dy]
dy
j (u)du.
up the given
split
function into groupings of functions u, v, w, ... each of which involves only one of the variables x and y. The differential of the
,
function
d (xn )
and
nx"- 1 dx
d (e x ) ~e*dx\
d (log x)
Finally,
it is
dx
x
to be noticed that
(J11
a method
u provides
For example,
tiation.
z~
if u,
and
of logarithmic differen-
are functions of x
and y and
if
QI9J
,
log z
and
The
is
illustrated
1.
Here
Ex.2.
Here
z=x2 + 2xy-y2
dz
z=-
x-y + l
dz=~
-y + l)2xdx-x 2 (dx-dy)
(x-y + l)
by the
by using the
332
Ex.3.
z=log(*
So
z
,
and
dZ
tillU.
+#2 ).
u where u = x 2 + y2
log
du
d(x*+y*)
^r
x z +yz
= ^xdx+ydy
u
xz + y z
z=t
Ex.4.
'x-y
So
log z
=2
loga;
Id(x-y)-
T~ -
# + ?/
a;
x-y
~ (2x
dz
i.e.
%
'
^^^^2)
= -^
- _=
^
{(2a;
a;y
2
2y ) dx
The
differential
dz=-z-dx + ~dy
dx
is
two
dy
differential
formula
assumed to hold at
The
is
It can
dz
dz
~dx +
dx
dz
be
Hence,
by
dy
J
dy
333
a function of
is
dzf'(u) du
dz
-i
and
We
/.//
du
can
now
pass to the
of
functions.
functions
dz
and
-~=f'(u)~
J
dx
dx
,,
dy
two most
du
~-=/(tO;T'
dy
useful cases of
more complicated
Hence,
t.
required.
a function of
z is
y)
=$
(t).
dz
-~-
<f>'(t)
and
and y = i/j(t)
y
with
dz
+ ~dy,
J
dx
dx = <f>'(t)dt
dy
and
So
The
is
Then
dz = ~dx
where
-=-
(M>
..
Cut
at
Write z=f(x
derivative -
derivative of z as a function of
dt is to
t.
dz dy
dx dt
dy dt
dt
This result
is
all
dz=~dx + ~dy,
dx
we need do
is
divide through
to
dy
by the
dz
dx
__
dz
dz
dx
^}y dx
dy
334
v.
functions having
Write z =/(#,
known
mi
y)
dx
dx
dx
dx=du
+ ~dv
ov
du
,
where
~
v)
/
oyouj
v) 9
dy
dy
dy
dy = ou
^du+~dv.
dv
and
7
fdzdx dzdy\
fdzdx dzdy\
dz=
du + U- 3- +3- / )
+
J
Veto cw
\dxdv
So
and y = *l*(u
dz=
Then
where x = <f>(u,
partial derivatives.
dfo-
oyovl
The
partial derivative of z with respect to u is the ratio of the differentials dz and du when t; is kept constant, i.e. it is the first bracket in
the above expression for dz. The partial derivative of z with respect
to v
is
obtained, in the
Hence,
dx
dx du
dz __ dz
dz dy
dz
du
dy du
dv
~dx-i--dy through by
__
dz dx
dz dy
dx dv
dy dv
in the ex-
either
du or dv and
interpret
Our
results are
still
case of single-valued functions and it remains to extend the application of differentials in the construction of a theory of multi- valued
and
implicit functions.
Two
335
its
/(#, y)
is
where /^ and/y are the partial derivatives of f(x, y). If (x, y) are
values making 2 = and if dx and dy are variations from these values
keeping 2 = 0, then dz = and
fx dx +fy dy = Q
the relation between the differential increments satisfying the
given implicit function f(x, y)=0. Hence,
is
dy dx
**
and
<1I1U
7fv
dx -
&.
-7-
-jr
fx
dy
=
satisfying the relation /(#, y)
and remaining on one branch of y as a function of x, let Ay be the
increment in y corresponding to a given increment Ax in x. Then,
Starting from a given point
(x, y)
by the
dy dx written above
:
is
Hence,
The
derivative -~-=
-^
**
of y with derivative
is
at the point
dx
-=-
dy
and
it
gives
a;
as a function
= -^
Jx
at the point
(x, y).
and
it is
stressed
most
strongly.
The
derivatives
ny
/JtJ
(x, y),
y as a function of x with
and
-7-
336
= 0,
f(x, y)
then
it is sufficient
~
dx
The
can only be
Here
f(x, y)
= a2 + y
- 16
So
-j-
ax
at the point
(x, y).
The values
is
In this
(x, y) must, of course, satisfy the given relation.
a double-valued function of x and it is possible to separate
case, y
the two branches
On
the positive
dx~
On
y~
dy__
dx~~
~
dx
\/16
x, therefore,
x,
given by
_
"
-x 2
_
~
function
'
with derivative
there are
two
different values of
one for each branch of the function. But both values are included
.
(1 tJ
dx
*!*
:
337
In practice, however,
f(x, y).
Q as
f(x, y)
it
it
is
following examples.
Ex.
The
function of
x.
relation
x2 + y2 - 2x + ty + 1 =
gives
y)-z 2 + */ 2
/(Z,
fx = 2(x-l)
we have
and
dy =
jTax
SO
x-l
-+2
'
rt
dx
i.e.
of x.
2.
The
it
dx
as before.
relation x*
From /(x,
stands.
-,
x-l
dy = --~
-j-
Ex.
y as a double-valued
From
;<y
function
OO
"
"7
Alternatively
(*
==
dx
+( M
^ -?/
-o
2
y -x
"
-3(x) =0,
x,
first
then from ~- =
dx
derivative.
--J-
we
implicit function
If/(#,
is
defined
y) =0 gives y as
and
a function
obtain
Jy
M.A.
338
I (jj) -
and
fjfl
<Py =
ctx
we have
The second
and
+ j/ 2 = 16
is
first
and second-order
For
y.
a function of x and
x7^y
gives
-=
and
y
In diagrammatic terms, the implicit function f(x, y) = Q is represented by a curve in the plane Oxy. In general, one branch of the
curve passes through a point (x, y) satisfying the relation and there
a definite tangent to the branch at the point. The tangent gradient,
referred to Ox, is then given by the value of the derivative
is
S= -**>.
Further, the curvature of the branch at the point
value of
-rctx
derivatives
at
(x, y).
now
Our previous
is
indicated
by the
we have a
It must be
curve with an implicit and multi-valued equation.
remembered, however, that the results refer only to a single branch
of the curve, the branch passing through a specified point (x, y).
The equation of the tangent at a point (xl9 y ) on the curve
is readily obtainable.
The tangent is the line passing
the
with
through
point (xly yj
gradient to Ox given by the value of
f(x,y)=Q
-~ = dx
at this point.
y
j
v
is
thus
339
where fXl and fVl are the values of the partial derivatives of f(x, y)
at the point (x^ y^).
This is a generalised form of the tangent
equation previously obtained (6.5 above).
For example, in the case of the circle with equation
we have
The tangent
= 2(^-1) and
.^
on
the
has
circle
y)
equation
- x,) + ( + 2) (y - yi ) =0,
(*i
1) (x
yi
/*,
at (xl9
(Xi-l)x +
i.e.
i.e.
a?!
(y l
lies
on the
The
The
circle,
we have
+ y^ - xl + 2^ =^ - 2^ -
13.6
+ 2)y=xl *
differential of
is
1.
thus
du
is
The
variation of u=f(x,
given by the differential
y, z)
du 7
du
du
-- ax
+
ay 4- - dz.
dx
dz
By
.
..
mately
du
du, A
du
A
Az.
Au~~-Ax+~~Au+~
dx
dz
A
dy
The
by some
where fX9 fv and/z are the partial derivatives off(x, y, z). Regarding
z as a multi-valued function of x and y defined by this relation, we
340
y constant.
.e.
\dx/y constant
cv
we have
-i
^2
Similarly
= fdz\
U-
fz
~ fy
T-
dy
\dyj x
/,
constent
derivatives.
at (xl9 yl9
2j)
-g
/
i-e.
More
(x
generally, for
variables,
we
The complete
- 2/i)
(see 12.5)
- xj)
define
differential contains as
many
The
b)
for
two variable
factors of
= constant.
In the normal case, one curve of the system passes through each
point
(a, 6)
the plane).
.
dx
/=ai
and
Differentiating
dx
f*=db>
fa da+ft db=0
the (approximate) relation between increments da and db in the
factors along the constant product curve through (a, b).
This
is
any point
(a, 6)
we
care to select.
341
Hence, the
(a, b) is
**=J
da
when
fb
r=-*Uda
fb
The value of r depends on the combination of the factors considered,
It represents the additional amount
i.e. is a function of both a and b.
of the factor B, from the given combination of factors, necessary to
maintain product unchanged when a small unit reduction is made
in the use of the factor
Since the constant product curves are convex to the origin in the
normal case, the value of r must increase as b increases (and a
decreases) along the constant product curve. The convexity con-
The
is
interesting point
"
measure the
(a, b)
now
is
"
elasticity
to determine
of substitution.
i.e.
to
dr=d (^)
as
A and
\Jb'
rate of substitution.
The
elasticity of substitution
between
and
B is
~'
!(-)
b
\al
r
342
a db - b da
But db
dr
and
dr
da -f ==
dr
da
7,
db.
db
so
Jb
1
ar~\-b
fb\
-
TT
Hence,
dr
ar = -
and
da
dr\
T - da/
da.
db
+b
ar
ab
dr
dr
db
da
and
in terms of the
Evaluating
)
(
)
& da = da (
db
db \fb j
\fb j
second-order partial derivatives of /(a, 6), it is found that
-
first
and
abT
T=
where
(faa fb
2fab fJ>
+fbb fa
2
).
From
appears that, although a has been defined
for the substitution of B for A, the same value is obtained when
the substitution is of A for B. The elasticity of substitution is
this last result, it
d tdb\
d*b
-_
da
da \da/
d ,
/y\
da
,
_ (dr
I
\da
dr db\
-
(a, 6) is
&
dr
db da)
db
dr
da
d zb
Hence, a
is
i.e. it is
tution increase as
is
substituted for A.
The magnitude of CT
is
by
substituting
B for A.
B in
proportion as
is
343
d b
is
a straight
line, -=-^ is
zero
and a
is infinite.
If
and B
are entirely
product unchanged.
right angle
As a
-=-^
from zero to
infinity,
is infinite
is
zero.
increases
increasingly easier.
So, the elasticity of substitution a varies from one combination of
is independent of the units in which factors and
factors to another,
we have
r=
and
a=
'
and /w
=-J/
=-/.>
*
,
(constant
Since
dadb
* It
~a
,
it is
r~-
was in this form that cr was first defined by Hicks, The Theory of Wages
See, also, Robinson, The Economics of Imperfect
(1932), pp. 117 and 245.
Competition (1933), pp. 256 and 330, Lerner and Kahn, Notes on the Elasticity
of Substitution, Review of Economic Studies, 1933.
344
Exactly similar definitions can be given for the marginal rate and
elasticity of substitution for an individual consumer's scale of
preferences.
is
defined
by the equation
<f>
(x, y)
= constant.
_^
dy =
dX
In the normal
the origin.
good
(x, y) is
'
<f)y
The marginal
X in consumption,
defined as
_^
~dx~fa
"
"
But there
is
no need to consider
at
all
the expression
and
of indifference.*
(x, y)
= constant.
The marginal
**'
dx
* See
1934.
The reduction of
- -~
J
preference as the case where
sates for
is
by
1 is
made
since
we wish
an equal addition to next year's income compena given reduction of this year's income, i.e. where ( - -~ ) = 1. This
is
measured.
elasticity
345
is
then
11.7 above).
F(x,y) =
is
(--r-jj-r
CLXj
y
y,
production
elasticities
of siibstitution then
negative sign
follow
f(xl9 x 2 )
= ifi(x)+x
by
1 *li
(x)--r-
= Q.
(where aj=
+a: a )
Xx
where
Hence,
that p
dx ^
is
is
=-
positive.
It is
346
demand
function
is
p = \ft(x)
is
we
which
satisfied either if
is
numerator of p
increasing.
condition
positive.
The
is
negative or
if ^"(x),
though
$'
in
law
A
first
pft-ax.
rather more complex duopoly problem is the following. The
duopolist is assumed to act as before, expecting his rival's
own
The
actions.
reaction curve
FIG. 86.
is
dx
-=-^
in the normal
between - 1 and
assumed to forecast correctly the
effect of his
own
dx
rival's output,
Cv The
i.e.
is
actions on his
from
dn
-j
a#
(where
2
a?
<
and
dx%
is
347
greater than the form {^j(x)-\-x^'(x)} in the case where his con-
jectural variation
is
zero.
~~
must be
'
and x 2
>x
2.
Ox 2
sum of
)
less
Xi
to his
rival's reactions.
price charged
by
previous case.
EXAMPLES
XIII
Differentiation
in x and y from the point (x, y), find the
increment in z = x 2 4- 2xy - y 2 in terms of x, y, h and k. What is the difference
between this increment and dz? Show that the difference is of the second
order in h and k.
1. If h
Write down the equation of the tangent plane at (a, 6, c) on the surface
y) and show that the increment in the height of the plane when increments dx and dy are given to x and y from (a, 6, c) is dz. Hence illustrate the
approximation of dz to the increment in z.
2.
zf(x,
3.
z
= \og
4.
Evaluate the
6.
7.
4-
differential of z = (x + y) (x - y)
2
2
differentiating z x -y directly.
Obtain the
and check by
5.
x3
differentials of z
3xy
= ^/x 2 -\-y 2
~
ex v
Show
differential
differentiate z
of u - (x 2 +
Deduce
-
(x
by logarithmic
+ y) *Jx - y and
- z z
2xy y )e
0)
-f 2// '(0,
y
-= 1 -x+y
= (x + y)ex~v
.T/a (0,
differentiation
0)
approximately when
x and
y,
approximately.
-\-x-y
y.
348
Show that
8.
= %(x-y + 2)
x-\-y
nearly equal to
when x =
9.
z
and y = 0-9
The volume of a
1-2
%TTX y.
show
mately.
10.
For the cono of the previous example, show that the proportional
volume
increase in
is
approximately 2
Ax
--
Ait
f-
when x and y
are increased
by
volume
at is the relation between the pressure (p) volume (v) and temof a gas, a being a constant, show that the proportional increase
in volume is approximately equal to the difference between the (small) proportional increases in temperature and pressure. Deduce that a simultaneous
1 per cent, increase in temperature and pressure leave the volume approximately unaltered.
dz
x* + y 2 where x
1 + 1 and
12. From the expression for dz, find - when z
11. If
pv
perature
(t)
Cut
y~l-t.
a function of
z as
Express
e*
and y ~ e~ l
result
by
direct
derivation.
13.
Evaluate
---x fy
if z
dt
14.
Find
and
if z
whore x
log (x
y),
where x = - and y
v
u
u and v and check by direct partial derivation.
If z -/(#, y), where x ~ a + at and y-b + fit, show that
du
d'V
Express
z as
function of
15.
dz
-^
dz
n dz
au +
where x
d zz
and
<*v
d zz
+2
d zz
dz
dz
dz
~- = a ---f n
dv
dx
dy
Generalise by finding tho partial derivatives off(x, y, z,
u and v if x au + <xv, y bu + ftv, z cu + yv, ...
dz
dz
= (i~- +
^'
dx
du
dz
b~
,
n9 d*z
and
dy
...)
as a function of
17.
Find
---
dt
when z =/(#,
y),
18.
function f(x, y)
where u = Xx and
and show that
aad
a
ox
dz d*x
dx dt z
dy dt^
r
homogeneous of the rth degree iff(u, v) = \ f(x, 2/)
Differentiate each side with respect to A, put A= 1
is
v=--Xy.
dz
z
fdy\*
dy z \dx/
+y
oy
rf( x > y)
(Eider's
Theorem)
349
and y
..
,,
=
x+
ox y~
If the function
ez.
is
oy
homogeneous of degree
show that
r,
Find
~
and -~^ from the implicit function
dx
(a;
CLX
a)
(y
b)
= c*.
y+g
~
~= - ax+
hx b
+ V +J
d u
dy~
and -y-^ when a; 3 -f 2/ 3 - 3xy 0. Show that y is a
-y
dx
dx
when x = ^/2. Interpret in terms of the graph of the function.
2i
22.
Find
23. If x 3
4-
3
3
y + z - Sxy
Given f(x,
y, z)
defines z as a function of x
partial derivatives of
= 0,
and
y, find
maximum
-
ox
and
oy
z.
and second-order
partial derivatives
of z as a function of x and y.
26. If x 2
+ y 2 - 2ax -1-1 =
+ x* - y 2 -
= 0.
z
c is
26. Show that the tangent line at (x l9 y^ on the curve ax* + by
axx l -\-byy 1 ~c, and that the tangent plane at (sc l9 y lt zj on the surface
ax 2 + by 2 + cz 2 d is axxl + byy l + czz^ d.
27. Explain the moaning of each of tho six partial derivatives, of one
variable in terms of another, obtainable from the implicit function /(a;, y, z)
0.
Express each in terms of the partial derivatives of/ and deduce that
dz dy dx_
_
dy dx dz
28.
Two
relations
<f>(x,
y, z)
= and
i/r
(x, y, z)
define y
and
~ and ~
the relations xy +
z
2
yz-z = Q and #
-f-
z as functions
and
y-
in terms
to
give
Economic applications of
differentiate
x=f(a,
b) is
___
Ca + Db
--
"
31. Show that the property of the previous example is also true of the
quadratic homogeneous production function and illustrate with tho function
350
2Hab - Aa 2 - Bb 2
x = Aaab& ?
point
(a, 6)
__
a>6>
first
derivative
Show
is
'
Hb - Aa =
lines
and
Ha - Bb = 0.
*J2Hab -
'(H
Show
Hx
34.
-AB)x
_ - (H(Ha-Bb)*'
d 2b
da 2
OT-H,
a.
l
JL>
Hb-Aa
Ha-Bb
x=2Hab- Aa 2 - Bb
that
is
Aa 2 - Bb 2
-I.
~AB)ab
cr
for all
com-
binations of factors.
35. Show that the elasticity of productivity e (10.8 above) is tho elasticity
of the vertical section of the production surface through tho axis Ox and the
given point on the surface. Use the results of Example 19 above to show that,
for
any production
function,
dx
dx
elasticity of substitution is
ff
37. If ax 2
-H
by
X and F, show
X production
box + apy
.
-}
is =--
elasticity of substitution is
always unity.
Two
and B.
duction.
39. If, in the problem of tho previous example, technical conditions give
two production functions x 0(a, b) and y$(a, 6), show that
/da\
\dx/V constant
and
interpret the
40.
Of the
meaning of
duopolists of
fa
^a0&~"^Z>fAfl
this derivative.
Examples VIII,
on the
assumption that the second does not change output while the second correctly
estimates the first's output changes consequent upon his own changes. Show
that the total equilibrium output is now approximately 44 sets per week. How
is this output divided?
CHAPTER XIV
now
and ~- 7^0
that -ux
Then
whether
z is
maximum
or a
The
b.
sign of
at
OX"
minimum.* The
(a, b)
dz
^ox
determines
a,
d 2z
In
(a, b).
(jy
is
an implicit
relation
b) in
between
minimum
may
9 2z
correspond to
<
in the
W.E.
maximum
W.E.
W.E.
direction.
values
and
The curve
of these points
the condition
may
correspond to
Some
(satisfying
(^>o)
direction.
direction.
values
minimum
the
values of z in the
ridge
on the contour
and trough
map
of the
352
surface.
(x, y) is
dz
which
dx
dx~
dz
= 0. The
zero whenever
is
dy _
(/X
ridge
and trough
lines of the
surface thus lie above the locus of points on the contour map where
the tangents are parallel to the axis Ox. For example, in the case
shown in Fig. 87 below, the line
across the contour map correa
to
the W.E. direction.
line
of
the
surface
in
ridge
sponds
AS
similar analysis
holds if
J
^-7^0 and
dx
-=0
at
dy
maximum
or
minimum
any
point.
J r
The
value (according
to the sign of
lines of
d z\
-~
j
The
ridge
and trough
direction.
tangents to the contours are parallel to Oy. The line CD across the
contour map of Fig. 87, for example, represents a ridge line of the
surface in the S.N. direction.
The
two
more
variables.
zf(x,
y) are zero
at the point
dz
dz
=Q
dz=~dx+~dy
dx
,
dy
for
dy,
i.e.
353
variation whatever from the point (a, 6). Such a point is said to
define a stationary value of the function. Ignoring the possibility of
inflexional points, there are three cases to distinguish
(1)
The value of z
is
maximum
the surface
(a, 6),
where x = a and y
(2)
(3)
zf(x,
for
y)
any
variation of x
and y from
b.
The value of
mum
The three
Fio. 86.
to
Oy
Ox
= OJ.
=0
There
is
354
trough line in the W.E. direction cuts the similar line in the S.N.
direction. The lie of the contours around such a point determines
nature of the stationary value. If the contours tend to close
to a single point as their height increases or decreases, then the
ibhe
down
stationary value
value of type (2).
is
maximum
or a
minimum
and there
value of type
(1)
maximum
b respectively.
A minimum
minimum
and
and continuous.*
is
its
It is
value of z
values together
make
A maximum
is
a matter of some
3 2z
If
difficulty.
z
it is likely
directions.
3 2z
must be a maximum
and
and
d 2z
-
that z
is
in each of the
maximum
in all
oy*
have a minimum value for all directions of variaby no means certain. We must exclude
the possibility that z behaves differently in some directions as compared with the fundamental directions. It is shown below (14.7,
Ex. 3 and 19.1) that
then
z is likely to
tion.
But these
results are
dxdy
is
Hence
* As in the one-variable
case, a maximum or minimum value of z f(x y)
can occur at a point where the partial derivatives are not continuous. Such
a point is not shown by the criterion below.
t
355
*?=*? =
dx
*
/o\
(2)
d z
If ^
dx
A such
u 4.u
that*
and
a,
j/
= 6,
d 2z
function.
If
ox 2
then /(a,
6) is
d *z
> f^
1
maximum
-=
dy
n
2
then /(a,
*.
at
value of the
xa, y = b,
\dxdy /
d 2z
and
inequality at a point
value of the function.
a *2 a2 *
dx dy
dy
a point #
The
By
*
^ d z are
*
and
negative
&
2
6) is
same
minimum
to the
possible to
is
show
whenever
that,
I d 2z \ 2
is
dx 2 dy 2
may
still
\dxdy/
be a maximum or
is
d 2z d 2z
2 ^-r
2
dx dy
d 2z
< I --^- \
a saddle point.
then the
\dxdyj
But the
case where
minimum
value or
it
may
not.
The
z)Q
only to write
-fa
~jT
dy
/,
criterion applies.
minimum
The
-~-^
and the
or
and
ctliU
Jz
value of
Similarly, if f(xl9 x 2
dy^^dy^ '" =
dy_
dxt
dxn
...
xn>
dx 2
y)
=0
=Q
An
the variable y
to be
is
maximised
for variation in
xl9 # 2
...
for
any variations
in the variables
xly x 2
...
xn
xn the
,
(since
So
held constant.
maximised
(or
14.3
The equations
=f(x, y) are
~ = ~~ =
are solved
In the majority of
the
second-order
conditions
sufficient
the
cases,
(involving
partial
derivatives) enable us to distinguish maximum and minimum
for
values.
fail,
map
The
following
Ex.
z=x2 + y*.
1.
Here
;r-
dx
There
is
= 2#
and
^-=2y.
dy
x=y=0
and
this
minimum
=2
3-2=^
oy
and
a-|-=0.
ox
oy
z=2x+y-x 2 +xy-y2
2.
Here
~-
ox
The
found to support
ox*
is
357
= -2x+y* + 2
and
lines
along
Ox and Oy and
~-=xoy
2x-y-2=Q
There
is
and
x-
Suice
dx*
- 1,
- - 2,
and
,
is
^-5a
= - 2,
FIG. 87.
map
of the function
shown
is
down
358
Ex.
3.
TT
f-4 fvf*o
licit*
z=4x2 -xy+y 2 -x 3
Sz
=--
X'**
&jc
/- ox
-%i"
y-~
dz
_
*
.
TT~
...
= 2(4-3*);
-1
and
S-2.
-8x+y = Q and
On
#=2z/.
and
-?i
^ -x
.)'='
y^
5--
Fia. 88.
order are opposite in sign ( - 7 and 2) and the stationary value here occurs
at a saddle point. Fig. 88 shows certain curves of the contour map of the
- 2
parabola y = 8# 3x ) represents the
ridge and trough lines of the surface in the W.E. direction. The part
function.
The curve
ABC
(the
4.
;:
and
^-
'~r\>v)
^52^
/}-?
,
7$"y
f\y
#<o
(4.
-<
~=0 and
359
^ ne
is
trough
line
and
is
Une
the ridg
The
32
p.
\dy
line
the
fc
part
= 2y)
is
^-i>0)
2
/
The
lie
of
dy
the contours about the two points of intersection of the line and the
is a minimum value of z at the origin and a
Ex.
4.
Taking
z as
a function of x and
y,
we
find
~ x -I
dz
dz
""
(82
+ 1) 2
when x = 1, y = 0.
Similarly, at the
and
=0
So,
when z = - 1, the
and the
same
5
= -
cross derivative
minimum
value of
value of
z.
The
2.
Monopoly and
XIV,
found to be a maximum
by a contour map of this
J is
14.4
point,
9).
joint production.
at a total cost of
is
y=x pl +x 2 p 2 -II.
1
relations, this is
360
prices.
It
revenue.
is
fixes prices to
for this
...
i.e.
and
is
sn\
dx,
a/i\
a/7\ a# 2
a^!/ dp 2
a
a# 2 /) a^
2
x +l p1
a^ + /
}.*
Ip J
r
maximise net
^
=0.
Subject to the
prices.
obtained
the
maximum
for
conditions
a
prices
(rather than
satisfying
a minimum) value of y, the problem is solved.
To
xi = al ~~a n p l -a l2 p 2 and
X 2 =a 2 -a12 pl -a 22 p 2
The average costs of producing the goods can be taken as constants,
a 2 respectively. Denote
<%! and
TT^a^ + aoO^
i.e.
'
when the
charged. Then
the demands
costs) are
"
"
competitive
and
is
- a a ).
and
-^L^XM-
2a 12 (ft - ax) - 2a 22 (p 2 - a 2 ).
Putting these expressions equal to zero for maximum net revenue and
solving, we find the monopoly prices
Further,
If
On and
~=
2
22
- 2au
are positive
~- = - 2a12 and
i2
<a
~=
2
ii
a 22>
- 2a 22
361
the
give
values of the constants are assumed below.
a^
will
maximum
net revenue
is
obtained
The net
when
~=0, i.e.
when
dpi
i2
(Pi
i)
~ 2a 22 (p 2 - a 2 ) = 0.
Since
~^\
and
raise price.
If a^ 2
*
ii<aii~ s
(1)
and
is
and
Here, for the joint monopoly prices, (PI-&I) and (p 2 -^) are
positive and both prices are above cost as represented by o^ and a 2
It may or may not be that both prices are above those of separate
.
monopoly.
where a la
(2)
" and
#10
it is
a 22
12
22
exactly parallel
#20
a
impossible, since a 12 < a u a 2 2
.
#20
<
362
the relation between the goods (as shown by a12 ) is weak as compared
with the direct price effects on demand (as shown by au and a 22 ).
and
ii*ii
(2)
demand
which the
is less elastic
razors).*
and
interest.
period of production
x=f(a, 6, t).
assumed that the prices of the factors are given as p a and p b and
the market rate of interest as lOOr per cent, per year compounded
It is
continuously,
it is
xe~ rt
* (a
'
M)
(say)
is
"
"
* For an
loss leader
analysis of the
problem, see Roos, Dynamic Economics (1934), pp. 128-47. On problems of joint production, see also Stackelberg, Grundlagen einer reinen Koatentheorie (1932) and Hicks, The Theory
of Monopoly, Econometrica, 1935.
^
da
dt
- rt -
we have
log (ap a
dx
dy
y
y da
x da
dy __
variables to
=
db
log y = log x
Since
The
y.
363
+ bp b
),
pa
^
'
ap a -f bp b
dx
pb
ydb~x db
ap a
1 dy
Idx
_- ____
__
p
y.
dt
a;
2/3^
dx
~
*
ai'
Idx
and
36
~*a*
Suppose now
that there
is
so that the
itself to
maximised value of y
is
P a = e~ da
*
T-
and
rt
So
Production
is
=e
Pt>
^
~ rt
make
r is
(discounted)
^db
is'
is
j3
monopoly equilibrium
are
Pa
since
=^--^, ^ = _,__
(1
Idx
= a-,
x da a
dx
=
-^1
x
db
-a
7
and
and
1 dx
8
---='-.
x dt t
r=-,
364
is
by the
rate
of interest and not by the prices of the factors. The first two conditions are equivalent and imply that (1 -<x.)ap a equals
61 -<xp
.e.
Only the
ratio of the
amounts of the
.
'
factors used
is
determined
the
--
constant,
(as represented
by the entrepreneurs)
is
then constant
also.
In the
values.
values, arises
function
related
zf(x,
by some given
relation
<f>(x, 2/)
minimum
The
= 0. The
values of a
given relation
z=f(Xyy) = *l*(x)
or
one
Substituting,
(say)
*
Compare the results here obtained with those given by Edelberg,
econometric model of production and distribution, Econometrica, 1936.
An
365
and
S =/ +/.|
,
^,|.0.
=-/-/Equating
y)
<f>
we
obtain
maximum
has
y) =
(x,
</>x
or
minimum
values
<f>y
is
further.
We find
_
dx*~dx
The
on reduction.
by the
side relation
</>
(x, y)
= 0, and
determine where
its
that, at these points, the given curve touches a contour (see Fig. 89
below).
<f>(x,
y)
is
then
366
f \
which
*
\""r)
f
is
= constant,
i.e.
-7^) equals
Jv'
we
variables,
seek the
maximum
or
Then y
is
a function of (n -
...
1)
and
zero.
It follows that
Jx^ __
J_xj_
^x,
<*2
__
_JXn
i>x n
is
maximum
or
minimum
...
values of
y.
maximum
all
Sufficient con-
minimum values of y
the variables
between
are required subject to r given side relations
(where r <n). An alternative method of approach can now be used
In a more general problem, the
to advantage.*
<f>(xl9
write
or
x2
...
z =f(xl x* ...
Then z must have a maximum or minimum value for any values of
A and fi whatever (since the coefficients of A and p, are zero). But
is
* The
method, which also applies in the simple case (r= 1) already analysed,
known as Lagrange's method of solution by " undetermined " multipliers.
See, for example, Osgood, Advanced Calculus (1925), pp. 180 et seq. and de la
Vallee Poussin, Cours d'analyse infinitesimal, Vol. I (5th Ed. 1925), pp. 147-9.
367
u,
maximum
or
minimum
all
pendent variables,
and -
dxl
are zero.
In this way,
we have
. . .
must be
OX^
n equations
altogether
OXg
zero.
For a
dx 2
These, together with the two side relations, determine certain values
of A and /z and of the n variables xl9 x 2 ... x n Amongst these values
.
Examples of
relative
values.
maximum
case,
Ex.
or
minimum
To
= x2 + y 2
relative to
<f>
x-2~y-l'
Hence, x = 2y.
5y
So
,-li
+ 4=0.
*=
and
l(ty
are
= x 2 +2/2 = 5l
= 2(3
By
it
mum
zx
2
shows certain contours of the surface
+y2 (i.e. circles centred at 0)
and the curve representing the side relation (a circle centred at a: = 2,
368
y = l).
2=6- 2^/5
is
a relative
1*53 approximately,
which
For
minimum
= 6+ 2^5 = 10-47
For
approximately,
Ex.
To
2.
maximum
>
Since x
+y 2 +z
a 2 and
4xz
4xy
x,
=y = z 2
y and
cf>
of F,
4yz
x2
2
</>
maximum
It follows that
z are positive,
we
find
<f>
= 22.
is
(relative)
369
maximum volume
a cube of side
,~
inches.
v*
Ex.
3.
fx ^fy =0
The function
z =/(#, y)
The
at this point.
(a, 6),
so that
relation
y-b=m(x-a),
where m is a fixed value, indicates a particular direction of variation of
x and y from (a, 6). To find the nature of the stationary value of z in this
definite direction
-jL
= mj
-~
xv \
(.i-J
m + 7~
+ fxxjyy
f
\
Jyy
Jyy/
.
-Jyy
Jxy
The
JxxJyy^'Jxy
has a
maximum
value in
all
is
directions from
(a, 6).
These are
i.e.
sufficient
2A
M.A.
370
^=_/.
da
_ =J
dU
So
is
/'
_ =1 ,.- f ft= o
db
,
(|+1 , t
minimum
cost,
*=&.
i.e.
Ja
The
a.
factors are
employed
in
Jb
So, if
y->0,
cLa
their marginal
Further,
/7
minimum
The
is
line
77
cutting the axes at distances
P*
the line moves
and
TI1
from 0.
As
/I, is
- --
and
increased
P*
If a given product x
combinations
(a, 6) of factors lie
possible
seek that comcurve.
We
the
on
corresponding constant product
"
"
of the
cost line
bination with minimum cost, i.e. lying on the
is
away from
to be obtained, then
all
parallel to itself.
which
The combination
given by the
where the constant product curve
nearest 0.
is
and
corresponds to
it
(\
-
This
are equal.
is
is
371
0), there
minimum
f
---
cost.
is
is
of
only one
At P, the
cost
P P
lines
l9
2 , ...
where
A^A^,....
This is shown in Fig. 90 where the
values of x(xly x 2
...
increase.
As x changes
continuously, the
points describe a curve in the
The varying coplane Oab.
A4 a
of a point on the
show the variation pf
ordinates
curve
demand
FIG. 90.
varies.
cost corresponding to the cost lines touched defines the total cost
function for varying output x.
is
linear
Theorem
XX
So
te
=p
<
We
Now
da
dx
da
since
db
'j^+fojZ^ 1
&omf(a,b)=x.
372
changing and p a and p b fixed. Hence, average and marginal cost are
equal at all outputs. Average cost must thus be constant irrespective
of output (see Examples XVI, 22, below), a natural result in this
In Fig. 90, the constant product
curves are now of the same shape (radial projections of each other)
and the locus of P is a straight line. The factors are used in the same
case of constant returns to scale.
So
Pa=P/a
is
sold on
and p b =pfb
"
"
This
is
the law of
x = <f>(p) with
and
elasticity
?j
=-*-
6)
(!)/(,
6)
also
= *(!>);
V)pa=pfa',
(3)p=p/-
b)
and
IIpx=ap a + bp
</>(p)
total cost
are
with constant
returns to scale, is
can trace the variation of the
We
demands for the factors of production, given above in terms of p a and p b , as one of the prices
(say p a ) changes while the other (p b ) remains constant. For the
linear
faa=~-a fa
The
and
6),
fbb = - fab
elasticity of substitution
we have
(12.8, (4), above).
is
cr=
*^J db
and
(2)
(3)
373
p b and
Making use of
and
and
(2), (3)
(4),
we have
db
.
By
and written
- -rr
dp a
.
56
^
a (ap a
-n
Pa \ XP
da
A
and
a6,
--
(rj
bp
--
Eb p a db
Ea =~p a da and -=
=V ^
^b dp a
a
a
a
a
Ep
dp
Ep
factors with respect to p a and
XP
(7
'
a).
the
xp^'
dp a
Write
TTT
^=
* or
Ka =
and
xp
/c 6
-^(/<-
xp
/c 6
= l)
Then
Ea
and
The
*
Eb
interpretation of these results
is clear.
dPa
dPa
and -
"
" tya
which are easily solved. Or, the method of solution by determinants can
be utilised (see 18.6, Ex. 2, below).
374
factor
A rises,
ways.
for
both
elasticities
of demand.
Secondly,
B may rise
or
fall
effect
The demand
and
for loans.
We
by an index-
y).
maximum
vidual's budget
%p x + yp y = /*.
The
_
'
py
Pv
=h + +*=h-jl+'
so
d*u
and
dx~
- I +- + +
.
dy\
xPv
<I>
dy\ dy
XX
P V Z ).
375
thus
^* = ^v
Py'
i.e. the marginal rate of substitution between the goods in consumption (R = x
y ) is equal to the ratio of the given market prices.
Px
(f>
<f>
This condition, together with the side relation, is sufficient to determine the purchases of the individual in terms of the given values of
i.e.
to determine the
value of u
demand functions
of the individual
a relative
maximum
is
() yy
px -
<> xv
p xp y +
rxPy
<
>.
y)~ constant.
The point
curve at
demands
demand
functions.
for the
}J
This
is
* For more
complete accounts of the problem of demand for consumers'
goods, see Hicks and Allen, A Reconsideration of the Theory of Value, Kcoiiomica, 1934, and Allen and Bowley, Family Expenditure (1935). Expressions
are heie found for the elasticities of demand with respect to price or income.
The methods used are extensions of those first introduced by Pareto,
376
It
is
F(z,y)=0.
Interest
is
We
yearly.
present value
1+r
We have
^
= 1+JL^
dx
1+rdx
and
#2 = J
l+rdx 2
dx 2
y)
i.e. the incomes in the two years are such that the marginal rate of
return over cost equals the given rate of interest. The sufficient
condition for a
"
normal
"
maximum
~7<o
present value
*s
satisfied in the
Oxy
is
or lending
money this year to be repaid next year with interest at the fixed
market rate. This process leaves the present value of income un-
changed,
i.e.
by borrowing
is
the
*
The
Interest (1930).
is
year,
and
this
is
equivalent to the
377
made
by the individual
/
ij* \** j
yi
taken
is
quite immaterial.
The
relation gives
dy^
dx
So
\b x
+ 0i/
for relative
maximum
,-*_!
utility is
thus
'
*,
loans must be made so that the marginal rate of time-preference
of the individual becomes equal to the market rate of interest. This
condition, together with the constant present value relation, determines the incomes x and y in terms of the given interest rate. In
i.e.
(x-x
particular,
is
deter-
demand
of (x
may
The value
be positive or
according to the
interest rate, i.e. the individ-
negative
ual
may
borrow or lend
"
this
optimum"
As in the
problem,
curves,
\jj
if
the indifference
(x, y)
= constant, are
A'
FIG. 91.
'
'
in the plane
Oxy
(Fig. 91).
378
By
1"' + r
I)
'
1+7-
'
iff
(x, y)
= constant.
'
'
The
'
'
AB
and the
line
AB
ifj
the marginal rate of return over cost and the marginal rate of timeNotice that, for a line with fixed negative gradient
preference.
-(1
-t-r),
locate
for
maximum
obtainable
EXAMPLES XIV
General
= x*-\-y 2 -
379
is
4.
Show
trough
lines
5. If z
straight
value and z
x 2 + xy - y 2 a
= (x - y)ex+v show
and
minimum
parallel
and that
2
2
6. Show that z = (x + y )ex*-y* has a
1
saddle points where x 0, y
minimum
value at x = y =
and
2 (x - y) 2 - x* - y*.
2
2
2z = 0, show
9. If z is a function of x and y denned by x + y + 3z 2 - 2x
that the contours arc circles centred at x = 1, y = which expand as z increases
- l<z< --J-) and then contract as z increases further (
(
-i<z<i). Deduce
- 1 is the minimum and z~ the maximum value of z. (See 14.3,
that z
Ex. 4 above.)
-I-
Show that the only stationary points on the surface z x 2e v form a line
minima lying along the axis Oy. Verify by examining the nature of the
sections of the surface by planes perpendicular to Oy.
10.
of
11. If
(ax
ox
+ by + c)<f> (x,
y)
and
y),
show that
has
c)y
corresponding to ax
with
Illustrate
= x 2ey
+ by + c
on the contour
map
x 2 -{-y 2
x and y are
positive,
a 2 occurs where x = y =
Illustrate
to
N/2
+ y = 4.
2
/j*2
>tj2
The
multiplier
variables x
A.
380
18.
is
19.
rectangular brick has a given volume ; show that its surface area is
least when it is a cube. Show that the same result holds if the brick has a
maximum
volume.
20. An open box of given volume 4 cubic feet has a rectangular base and
vertical sides. It is made of wood costing 1 shilling per sq. foot. Show that,
for least cost of construction, the base of the box is a square of side double
the depth. What is the least cost?
21.
An
"
"
ellipsoidal
block of
wood has a
&
y*
a*
b*
c*
Show
- is the
that
volume of the
largest
cit.,
p. 140.)
thousand Ibs. per week of the two lines. For maximum joint monopoly
revenue, show that the prices are fixed at nearly 4s. 6d. and 4s. 9d. per Ib.
respectively.
25.
fixed
In the problem of the previous example, find the prices of the two lines
are less than the joint
per week
is x,
x,.
when the prices are p (shillings per razor) and p 2 (shillings per dozen blades).
Show that the monopoly prices, fixed jointly, are 4s. per razor and 2s. per
1
dozen blades.
381
produces
2 (Ci
and that
TT
= - 2<xx and p =
)3
j3
- ax.
-f-
4(X.)
if
that
<f>
<f>(x)
+x</>'(x).
Mono-
30. In the problem of 14.5, assume that the product after t years represents
the original cost accumulated at some continuous interest' rate of lOOp per
cent. Given the factor prices, express p as a function of a, 6 and t. The
is assumed to arrange production to maximise p ; find equations
for a, 6 and t. If the maximum equals the market rate of interest r, show that
the result is equivalent to that of the competitive case of 14.5.
monopolist
function of 14.5
is
rr-
is
x^abe^*, show
whore
is
r is the
that the
market rate of
given by
32. If x A Jab is the production function, find the amounts of the factors
used at given prices pa and p b to produce an output x at smallest cost. In the
case of pure competition on the market for
with the demand law x fi- up,
show that the demands for the factors are
^4
-,
Vpa
A*
and
A
-7
"
" factors A and B and
is produced with two
substitutional
34. A good
"
"
a
limitational
factor G according to the relations x=f(a, 6) = ^(c). If
each output x is produced at minimum cost at given factor prices pa p b and p e
,
382
PaJPb^^H_
Pc_
?(C)"
fixed and output chosen for maximum profits.
fa
**
Show that
and
"
u = xyP
demands
is
an
^^
--
*~~
and y
and py
where p
2
Show
36. An individual's utility function is u
2gx + 2fy - ax* - 2hxy - by
the coefficients
that his demands for the goods are linear in the income
depending on tho prices of the goods.
.
goods
where
= 0.
Show
demands
<f
(x, y)
for two
in the case
that
*-+
where
<Pxx
<Pyy
and deduce that the demand for a good decreases as its price increases provided
not
and
that
<^ are negative. Why is this statement of tho problem
independent of the particular utility function selected ? (Seo Pareto, Manuel
d'&conomie politique 2nd Ed. 1927, pp. 679-84.)
38. The incomes of an individual in two years are x and T/ O and his utility
function for incomes is u = x*y&. Show that the demand (x - x ) for loans this
year decreases as tho given market rate of interest lOOr per cent, increases.
Deduce that the individual will not borrow this year at any (positive) rate of
Q
interest if
y 9 < -a #
(2n+
1)
Jars
1,
Write
...(w-1),
x = at + b + v
t
where a and
Ztx t
-^,-~
2t*
and
&
Zx
is
383
a minimum.
t
^
2n 1
1 ) observed values.
-{-
where S implies summation over the (2n 4does x at + b represent the " trend " of the
41.
series of
Iri
what sense
XI
certain dates
at
CHAPTER XV
INTEGRALS OF FUNCTIONS OF ONE VARIABLE
15.1
The
THE
concept of an
and two
view, an
definition of
definite integral.
"
"
is
is
variable.
of the
first.
It
is
is
the
tion process. This is merely a matter of formal presentation
sum-area and inverse-differentiation properties of integrals are
;
xa
385
please into
a=x
We form
the
sum
i3
x% # 3
9
...
is
the length of the section times the value of the function at the lower
For convenience, a special
(or left-hand) point of the section.
notation
is
is
sum and
symbol
(r
= l)
the
to the
r=l
No
of the function between the lower limit a and the upper limit b and
written in the symbolic form
DEFINITION:
&
Ja
Ja
So
fb
I
f(x)dx.
f(x)dx=lLim
n K
-xr ).
r=l
called integration.
From
is
depends only on the form of the function and on the values of the
*
The rigid
continuous.
2B
The
full
M.A.
386
limits (a
and
"
taken.
6)
integrated out
The
variable x
is
not involved
it
has been
".
It can be shown, further, that sums other than that written above
have exactly the same limiting value, the definite integral, as n tends
to infinity. Such sums are formed by taking, for each section, the
length of the section times the value of the function at the upper
(or right-hand) point of the section, or indeed at any point within
the section. This fact, again not formally proved, is supported by
Hence
f
Ja
'
inclusive.
(a, 6) is
divided
is
increased indefinitely.*
The
(1)
(2)
J\*{-f(x)}dx=-\*f(x)dx.
J a
a
Fb
(3)
J a
Fb
kf(x)dx
= k\
Ja
f(x)dx
(k
being a constant).
(4)
J\ a
J\'f(x)dx=
a
f(x)
* The
way in which the integral notation has arisen is clear from this rough
statement of the definition. In the limit, the sum 2f(x)dx is written Sf(x)dx,
S being an alternative symbol for 2- The S then becomes elongated into the
conventional sign
I.
387
(5)
The
t(x)dx.
{f(x)+4(x)}dx=ff(x)dx+\
Ja
Ja
Jf
a
We have
2f\Jf
x r,
try
V
r=l
n
2fJ\/~x
r)
- Sr ) + 2
<
(r) ( X r+l
r=l
= f */(*) * + f
J
i.e.
J a
n tends
on taking the
limit as
to infinity
number of separate
functions.
from
left to right
AP
(at
x=a) and
sum 2
f(%r)
x r+i - x r)
is
CD times
r=l
i.e. it is
thinner,
must
AP
J a
It
is
same
curve yf(x).
result follows if
we
start
from one of
/(#r+i)
x r+i - x r)
represented
CD
by a sum of
as base
and
DS
The sum
rectangle areas, a
as height.
We
have
now an
value which
is
the area
ABQP
'
is
is
r=i
A
is
fb
I
Ja
389
x=a
and
yv
o,
&
FIG. 93.
When
FIG. 94.
x=a
the
sum 2
r=l
f( x r) 0*Wi
- %r )
*s
It follows,
when the
fb
Ja
is still
f(x)dx
represented
Ox and the
the axis
by a rectangle
below
ordinates at
xa and x =
6,
parts of the area above the axis Ox are taken as positive and any
parts below the axis Ox as negative (see Fig. 94). The integral and
area as a whole may, of course, be positive or negative.*
So, if the function y~f(x)
is
(a, 6)
and the
f(x)dx
is
positive
and measured
'a
Cb
* It
f(x)dx
integral
'
is
ately as
Ja
f(x)dx and-
fb
I
f(x)dx, where
OO
c.
390
is
needed to
/b
Ja
- x r appearing
all cases,
(x r+1
fb
the integral
J a
f(x)dx
is
in
tween the curve y=f(x), the axis Ox and the ordinates of the curve
a and x = b. Various parts of the area must be considered as
at x
and inverse
differentiation.
all
values of x,
we have
dy = ,
:r 1+a:
ax
This
is
"
differential
"
equation
of this
unknown
~~ of a
involving the derivative
Is it possible to
ctx
=!
and
We know that
,-(a:
doc
One
possible
This
is
+ Jx 3 ) = l+a; 2
391
is
thus
y=zx + lx* + c
is
It
is
we can
2
expect no other form of y to have the derivative (l+x ) at all
points. In a particular case such as this, it is possible to reverse the
"
"
of the
differentiation process, to solve a
differential equation
above type. Notice that the additive constant, which disappears on
We
The
fb
definite integral
Ja
its
have now to
of the function f(x) and on the values of the limits a and 6. If the
form of the function and the lower limit a are given, take a variable
number x
as the
J a
f(x)dx.
The
value of the integral now depends on the value allotted to x i.e. the
integral is itself a function of x. It is called the indefinite integral of
y
DEFINITION
By
f(x) dx
indefinite integration,
J a
f(x) dx
f(x)dx.
=&
So
function of x.
we
ordinate at
now be
x.
The fundamental
can
stated
and
integration
is
392
Then
by property
(4)
f(x)dx
f(x)dx-\*a f(x)dx=\
'
The
of 15.1.
rx+h
rx+h
-F(x) = J
shown by the
area between the curve y =/(#), the axis Ox and ordinates at x and
(x + h). If h is small, the area differs by a small amount from that
of the rectangle with base h and height /(#), the ordinate of the
curve at x. So, if h is small,
F (x + h) - F (x) = hf (x)
--
i.e.
..
=f(x)
j-
approximately,
approximately.
i.e.
The fundamental
a function
and
<f>(x)
!/(#)<##
and
(f>(x)
arbitrary constant
must be
integral here
is
If
an additive and
The
Q.E.D.
+ constant.
x.
Putting x =a,
r f(x) dx
(f>
(a)
+ constant.
*<!
The
constant = -<(a),
i.e.
=6
i:
f(x)dx =
<f>
and substitute
(b) 4-
Put
So
If f(x)
is
thus
is
f(x) dx
and
<f>
(x)
393
if -=- {</>(x)}
ctx
=f(x), then
+ constant
Ja
To
The fundamental
result can
If
by
it is
/jilt
dy
dx
and y and
The
f(x)dx can
f(
differ
)-d
Hence
only by a constant.
di/
~-f(x)
is
ctx
y = \f(x) dx + constant.
We
equation -~=f(x).
dx
The concept of a
differential
equation will be
all
kinds.
The
394
to be integrated as
write at once
its
If
derivative.
-=-
Ja
{<f>
(%)}=/(%), then
we can
f(x)dx = <f>(b)-<f>(a).
lines similar
did
we have
d fxn+l
-=a*
Reversing these
integrals
(n^-1);
results,
& '
y-(logs)
cfo
we have
= -;
x
:r (*)'
dx^
"-
xn+l
xn dx =
(2)
Further, if f(x)
is
ex
(2')
f
J
+ constant.
f/7rrH n + 1
,
-f-
+ constant
(n
^ - 1).
/v 35 )
(3
^ - 1).
f
J
(n
constant
- dx =
log x + constant.
x
\e x dx
(3)
4-
= e'<*> + constant.
395
INTEGRALS OF FUNCTIONS OF ONE VARIABLE
Two such rules can be written down at once from properties
so on.
and
(3)
and
By an
There
For
of 15.1.
(5)
indefinite integrals,
(Ji(x) +ft(x)}
we have
dx =
is
no
difficulty in integrating
we have
doomed
{<f>
(%)}=/(%).
In the
d'Oc
Ex.
Ex.
2.
t(x
and
(ax
and
(ax
Ex.4.
,
and
22
Jx dx =
+3x + 2)dx =
2
#*= = N/# 3
x^ dx
by
above.
^x*+^x*+2x
+ bx+c)dx = - ax 3 + ^ bx2 + ex
(in general)
+ b) n dx = - a (ax + b) n dx = - I
--
by
(2'),
1.
1 f adx
f dx = r
7=
log
&v(ax + b)
]ax + b ajax + b a
.
, v
,.
(in general) .
dor
J^-loga+a?),
I
(1)
lx
(in
\
general)/ .
e
396
~
Ex
-i-^
xdx
and
J
ov
,_
14 -^
o^+te + c
by(2)
(in
>
Senera1 )-
Ex.6.
Ex.
=i
fe 2* efo
7.
2a;
ofo
J2e
feox+& da;
and
=-
oa;
=^
+&
e 2 *,
=-
efa
by
(3'),
eaa!+ 6
|ae
Ex.
8.
Ex.9.
lxe~**
dx = - H( - 2) e-*
^ = ~ ^ e-^
by
(3').
{x 2 e~**dx.
Since
^- (^e^^)
(tx
xe~ x
so
f (1
- 2#2 ) e-^
integral
e"**
x2e~ x* dx
rfa;,
^=
fe~*
Ife -ar*
f
i.e.
The
(in general).
though
it is
e~ x',
dx - - xe~ x
known
*
.
We
The
formula
ft
J a
f(x)dx =
<f>
(b)
<f>
(a) suffices.
For example
=log2.
Areas under plane curves can then be evaluated at once. The parabola with equation y =# 2 + 3x -f 2 lies above Ox for positive values of
x.
at x =
'z=0
and x = 3
is
397
We
a function
is
length h
(a, 6)
interval (a, 6)
is
is
= b-a
This
2n
is
number
ft
Ja
The
f(x)dx.
19
FIG. 95.
...
A 2n9 A 2n+l
AAA^.Ji.
The
The
OA
f
The
integral
OA 2n+l ~b
2,
...
and
can be
Ja
f(x)dx
it is,
in fact,
is
is
is
a and
= AP,
integral exists
ordinates
analysis, to define
new
It
functions as the
398
under the curve and on the base ^4 1^4 2 n+iJ *- e *^e sum
under the curve and on the bases A^A^ A 2A Z ...
As a first approximation, the area under the curve on the base
-4^4 2 can be taken as the area of the trapezium A^P^P^A^
-
Similarly, the
are
area,
i.e.
f(x) dx =
AJ^A^AS
when the
2
(This step
origin for x is taken, for convenience, at
does not affect the value of the area required.) The curve passes
through
Px
Solving for
-*,
a,
j8
ft),
and
P 2 (0,
y,
we
y a ) and
3 (A,
y s ).
Hence,
find
-h
~*x=>h
Lrf
is
-V
= -aA 3 + 2y/i = -(
The approximate
A BA QA 7
By
...
addition,
we have
f(x)
on the bases
399
i.e.
Hence,
3
'
Ex.
range
1.
To
(0, 1)
find
The ordinates of y =-
2/1
= 1,
The trapezoidal
we
divide the
at the points
of division are
r
2/2=1
rule
O A
+x
= l)
(h
2/3
= 1>
2/4
=$ and
2/5
= 1-
-rX
=P
+*) +2(1) +4(|+f)} =tft& =0-6933.
A +#
JO --^-={(1
The
nature of the approximation of the two rules is thus seen. The rules give
closer approximations, of course, if the range (0, 1) is divided into more
Ex.
2.
ordinates x
p.e-*
dx.
Jo
Jo
Dividing the range (0, 2) into ten equal parts (h=\), the ordinates at
the eleven points of division are found, from tables, as
ft
= 1-0000,
^5 =0-5272,
The
2/2-0-9608,
*/6
=0-3679,
ya =0-8521, y4 -0-6977,
y7 =0-2369, 2/8=0-1409,
and 2/11 =0-0183.
i/9 =0-0773,
2/10=0-0392
trapezoidal rule gives the approximate value
and Simpson's
approximate value
Jo
The required
is
thus 0-882.
400
The
relation
P and Q
\M.R.
FIG. 96.
by
OM. Denote
average revenue
Then the
total revenue
is
R=px = OM MP,
rectangle OMPN. Further,
.
i.e.
dR_
~~^ m>
dx
i.e.
dx 4- constant.
output.
Hence,
zero output.
zero at zero
R = f Pm d9
I
Jo
the area under the marginal revenue curve, above Ox and between
and M. As long as the marginal revenue curve is
the ordinates at
i.e.
401
either
how
OMPN
the position of
is
varies, the area of the rectangle
to
the
area
under
the
revenue
curve
on
the
always equal
marginal
base
OM
A similar result holds for any pair of average and marginal curves.
For example, if TT and 7rm denote the average and marginal cost of an
output x of a good, TT and 7rm being functions of x, and if the cost of
zero output
is
is
n=xiT
7rm dx.
I
Jo
Total cost is read off the average cost curve as a rectangular area
and off the marginal cost curve as an area under the curve.
al9
a2
. . .
am in
m following years is
where interest is reckoned yearly at lOOr per cent, (see 9.7 above).
This calculation can be generalised to allow for a continuous income
stream and. for interest computed continuously.
It is assumed that income is obtained continuously over time,
the rate at any time t years from the present being f(t) per year.
This implies that, in the small interval of time between t and (t + At)
where
t.
The
expression for 77
revenue curve,
2c
is
is
77
output
.
is
77
So 77 - 77
all
it is
ir
J
m dx
i.e.
402
As the number of
to t~x.
becoming shorter,
present value
is
this
time-intervals
is
approximation becomes
i.e.
closer.
sum
as the
The exact
number of
as
V =\*f(t) *"*<**
Jo
This
(
is
0).
income stream, the capital value changes from the sum of a finite
number of terms to the limiting case of a sum as represented by an
integral. We have an immediate application of the sum-area aspect
of an integral.
The result obtained holds for an income stream and a rate of
interest varying in any way over time. In the particular case where
income is derived at a constant rate of a per year and where the
rate of interest is fixed at lOOr per cent, per year over time, we have
rt
y=^a\ e~ dt = a \L
Jo
e~ rt
r
-W ~a\L
\
--e- rt
r
-U
y = ~(
i.e.
The capital value thus depends, in a simple way, on the size of the
income stream, the number of years it flows and the rate of interest.
Problems of capital accumulation can be treated in a similar way.
alt a 2 ... am are invested in the present and in succeeding
If a
at
lOOr per cent, compounded yearly, the total sum accumuyears
lated at the end of the period is y where
,
f(t)
from now
is
where interest
is
In
403
the particular case where the investment a and the interest rate
lOOr per cent, are both fixed over time, we find
=a
P
J
.e.
x years
is
interest.
As an
made
where interest
is
is
realised
accumulated value
we have
k
r
If
a 1 ~a
x=Aa b
and the
fl is
capital
level of
404
15.8
known way, on
dependent, in a
continuous life.
An
of
years
is
length of life of the good to maximise the capital value as a proportion of the cost
:
_a(l-e-
rt
y~
)
'
rf(t)
dy =
TT
Mere
,-
-*/'()"* fl
"
r{f(t)Y I
<Pir
+ f(i} ]
/'(*)/
for the
is
thus
~ + f(t)
e'*-l+r
TWr
is
of r
a constant.
t
in terms
ttJt
is
e rt
= l+2rt.
* The
analysis is based on the work of Wicksell following Gustaf Akerman.
See Wieksell, Lectures on Political Economy, Vol. I (English Ed. 1934), pp. 274
et seq.
405
= l+2x.
ex
= 1'27
approximately.
The length of
of the capital good, as selected by the entrepreneur, varies inversely with the rate of interest. If the market
rate of interest is 3 per cent., the optimum length of life is over
life
42 years, but at 4 per cent, the length of life is not quite 32 years.
Suppose now that production is carried on continuously, the
capital goods being brought into use continuously and uniformly at
the rate of n goods per year. After an initial period, it follows that
the goods are scrapped at the same rate, each having served its
optimum
life
of
At any moment,
years.
to t
with ages varying uniformly from
between
x
and
Ax
with
x
in
use
+
years of life to run is approxigoods
value
of
the
future
The
n
Ax.
product of one such good,
mately
discounted to the
moment
considered,
is
-(!--").
r
v
The
the
all
goods in use
intervals
is
approximately
Ax from
to
t.
Taking the
limit for the continuous range of ages of the goods, the exact present
value of all capital goods in use at the given moment is
~
r
= na
I
(
r \
+ - e- f
r
1\
r)
'
life
of each good,
is
dependent
406
15.9 Average
distribution.
We
are given
items showing values of a certain attribute
to
the
according
frequency distribution
:
families in a certain
or
statistical
figures,
where
"
"
value and the standard deviation indicating the
spread
"
of the attribute in the group concerned.
dispersion
Most of the variable characteristics considered statistically are
"
shown
between 3 and 4
and so
however, a rough
method and the results obtained are affected by the nature of the
grading. Something more precise is required for a theoretical treat-
ment.
shillings,
on.
This
is,
is
407
of items
N = Xf(x)Ax
is
Taking the
approximately.
limit,
we have
exactly
N=\*f(x)dx,
Ja
where a and
x=-lZxf(x)Ax
N J
\
and
oy^-r-,
x
(#
\
-_
J a
xf(x)dx
NJa
'
[f(x)dx
J a
(\x-x)*f(x)dx
r'-ilV
'*- N \(X
and
x)dx=
X)
*)
J\*f(x)dx
a
We
integral.
asserts that
y
X'
represents the
frequency
r,
a continuous
The number
a \aa
a &-* X!. a
_lf
= -\ x 4,
*dx = -^\
&
6 is
---
~-dx
a and
&
A,
is
A
N oc-lW1
dx=-=-r
-I
--1
1
a~
408
ax
Take
and
income over x
let b
is
tend to
infinity.
thus
N= a I
X*
and the average income over x
is
The law has the property that the average income over
constant multiple
\a
of
In practice
x.
I/
is
it is
approximately. Hence, the average income over x is approximately 3#, a result which agrees well with observed data of income
distribution, at least for large incomes.
EXAMPLES XV
Integration
Cb
1.
is
of
1 ?
n
2. Iff(x) is
its limiting
continuous, the
sum 2 /(
\
1
xr _|_/
dx = b -
\
)
'
a.
What
rb
r+1
(xr+l
- x ) has
r
f(x)dx as
.'(X
Deduce that
f&
xdx = %(b 2
a2)
re
rb
of
3. If f(x)
a, b and c.
= xn
Ja
Show that
4.
check that
~|
=
[
rb
/(a;)^|
-/(a;).
(Use property
(1)
for
any values
of 15.1.)
5.
ax + b
6.
Use the
7.
Show that
Cx
f
j
- dx = log
C
(
+ c*)
and
j
P x 4- P
-~~-x dx = log (e
1 -H
a;)
dx = x + x* + - x 9
that
that
dy =
-T-
_Ks-ft)
10.
Show
that \(x-b)e
=-
l(x-b)*
<fo
(~TT
= -o ae
--
dx
12. Express a* as a
power of
+ constant.
1)
i)
#-l
1,
Find
(2
log
8a
13.
409
2*6te.
esti-
mating (by counting squares of the graph paper) the area under the curve,
above Ox and between the ordinates at x- and x = 2.
integration, the area under the straight lino y x+ 1, above
the ordinates x
and x 1. Represent graphically and
calculating the area of a trapezium.
14. Find,
by
Ox and between
chock by
15.
Show
that
16. Find the area under the parabola y-x^ above Ox and between the
ordinates at x = - 3 and x^=3. Verify that it is twice the area between the
ordinates at x = and x = 3.
t
17.
axis
Show
Ox and between
same
Why
sign.
ordinates at x = a
and x = b
Q
(2
is
a2 log -
when a and
if
it
20.
Show
xe~ x*dx =
that
J
of a
(see 15.4,
Ex.
21. Calculate
Simpson's
a
9,
a?V* dx = -
*
\
2 .'a
.'a
e~&dx
for
any value
above).
approximate values of
and
is
range
known
(0, 1)
to be
a body at time
LT
bv
the
trapezoidal
and
JTT.
is
v =/(*),
t.
show that
x=
f(t)dt
410
Show
+ \at*
function
the
26. If
p
^
26.
is c
c is
the
Find the
demand
output
ir
is
is
pm = ---+
m = j=z=
cost of output x
is
c,
show that
o)
law.
27. If
ab
function
(x
---- x+b
revenue
marginal
is
is
known that
7r
m = ax + 6.
if
28. If interest is reckoned continuously at 4 por cont. per year, show that
the capital value of uniform income stream of 100 per year for 10 years is
approximately 824 and for 100 years approximately 2,454. (e^ 2-71828.)
29. Write down the capital value of a uniform income stream of a per year
for x years, reckoning interest continuously at lOOr per cent, per year. By
letting x -* oo , deduce that the capital value of such an income stream going
on
for over is
30. An income stream decreases continuously over time for x years, the rate
bt
being a e~ per year at t years from now. Find the capital value at lOOr per
cent, continuous compound interest. Show that this equals the capital value
of a uniform income stream of a per year for x years if the rate of interest is
raised to 100 (r + b) per cent, per year.
31. An income stream decreases continuously for x years. At time t years
from now, the income obtained is at the rate of a(l - 2 at) per year and the
continuous rate of interest is 100r(l - at) per cent, per year. Show that the
capital value of the income stream equals that of a steady and continuous
income of a per year for x years at the constant rate of interest, computed
otx) per cent, per year.
continuously, of 100r(l
32. In the problem of Examples XIV, 31, show that the value of
mediate products at any time is
all inter-
-IO-Dwhere - = 16 log
A.
(r
rt
being such that ap a + bp b = xe~ )
show that
33. In the
problem of
= -(l -e-p<
),
i.e.
the
product of the capital good represents a net rate of return of 100/> per cent.
(computed continuously) on its cost/(tf). Find an equation for the length of
life of the capital good so that p is a maximum.
411
34. In the competitive case of the problem of 15.8, the market rate of
interest is such that the present value of the product of the capital good
equals its cost. Show that the optimum length of life of the good as determined in 15.8 equals that determined in the problem of the previous example.
35. If f(t)
3a*Jt and the competitive case of the previous example holds,
show that the market rate of interest is approximately 4 J per cent, per year
and that the capital good has a life of approximately 28 years.
36. In the problem of 15.8, if f(t)
b*Jt and the market rate of interest is
lOOr per cent, per year, show that the present value of all capital goods in use
at
any moment
is
approximately k
0-55
is
5 per
where f(t)
problem of
b ( 1
----
Show
a capital good of
that the
er
life t
optimum value of
years
is
is
given by
When
by
were
By
differentiating
r^
xr~ l e~ x dx - xre~ x
(oo
for
Cb
r
x
r
x
any value of r. If Ir denotes " x e~ dx Lim \x e~ dx deduce that
b >oorlr _ l and that / = 1. Hence show that the average and standard deviaj
Ir
to infinity
CHAPTER XVI
DIFFERENTIAL EQUATIONS
16.1
relate to small
Information in
a
of
wide range
", covering
events, is scarcely to be looked
for in practice. Translating the data into forms suitable for mathe"
bulk
which
The nature of a
differential equation
can be examined
first
in the
x and y are
involved.
where f(x)
is
some given
function.
We
have seen
DIFFERENTIAL EQUATIONS
413
is
following sections
is
~J
or log
[-/
concerned almost
solved.
The meaning of a
most
diJ
form is
&x f(x, y)
At each point (x, y) of
clearly seen in
diagrammatic terms.
the plane Oxy, the equation provides a definite value of the derivative
-
ax
This
is
is
An example
dx
illustrates.
The equation
2xy
point
(1, 1),
is
-^
ax
At the
= J, a line sloping
414
the
the
touch the
Fid. 97.
differential equation.
parameter.
This equation
is
x 2 + y z -2ax +
the
"
"
integral
1=
where a
is
of the differential
equation.*
From a slightly different point of view, we can start from any
point of the plane Oxy and describe a curve through it by moving
The use of the term " integral " to describe the solution of a differential
equation is clear. The solution corresponds to a curve system which is built
up, or "integrated ", step by step, from the tangent gradients given by the
*
differential equation.
DIFFERENTIAL EQUATIONS
415
An
Ex.
1.
From
2x dx - e y dy = 0,
we
obtain
i.e.
Ex.
2.
differ-
~2xe~~ v
dx
x 2 + y 2 - 2ax + 1 = 0,
2x dx + 2y dy - 2a dx = 0,
From
we obtain
(xdx + ydy)
dx
ie
X2
+y 2
we
find
_
x dx + y
^
^
J dy
~2x
+ 1=0,
rt
(tx
i.e.
i.e.
rfy
as-ys-l
dx
"2xy
'
Ex.
3.
Differentiating
we have
Substituting
2
2
y - 2ax + a = 0,
2y dy
a =y
-2adx=0.
differential
.,
equation which
is
The
x*-ev~a, and
So the integral of
The
2xe~ v
is
ctx
416
The
result stated,
sufficiently for
single
our purpose.*
To extend
to cases of
f(x, y, z)dx+g(x, y,
z)dy-dz =
-^=f(
x >y>
z)
and
^~=9(
x >y>
z )'
The
faces.
is
The
Ex.
relation
gives
Substituting a
=2
x2 + y2 =az
2x dx + 2y dy = a
y dy
7/
We
have a
differential
dz.
2xz dx
being a parameter)
di/
-,
dz -
(a
we
find
+ 2yz dy - (x2 + y2 ) dz = 0,
_ 2xz
_
...
.
..
QYlf\
__
_dz - 2yz
.
appear.
is
the solution of
conta
an additive constant, a particular case of the present
-~-f(x)
-=/(#) contains
dx
17
general result.
DIFFERENTIAL EQUATIONS
16.2 Linear differential equations
Of the
the most
and
417
their integration.
y,
the linear differential equation in which the derivative or differentials are related linearly, squares, cubes and other
useful
is
where
of x and
y,
We
or as
5-'*>where /(x,
the other,
y)
it is
It
is
is
linearly, there is
no such
restriction
y.
As
Some
particular
methods
and
error or
many
much
method.
for
which
definite practical
^
dx =/().
(1)'
The form
By
where a
(2)
is
t/v
'
is
an arbitrary constant.
d n
the equation
2D
is
dx (log
Since
dy
y) =/(#)
M.A.
418
Hence,
log
t/=J
f(x)dx + a,
y(l-x)dx-xdy=Q.
1.
Here
2/
and
logt/
If
So
_i,
J^Iz.^1
x
dx
x
da:
log
(f)-(* -6),
y =#e~
i.e.
Writing
a=e
&
,
where a
is
+ constant = log x -x + 6.
(a:
-6>
==e 6 (xe~ x ).
we have
y=axe~
a function of x when
.
Ex.
To
2.
find
y as
of y with respect to
So
log
a;
is
y=a
a constant
x~~ dy _
ctj
~5
y dx
C dx
I
)-
t%
~j
y dx
*~
= a log x + constant,
= constant,
~ = constant = a,
i.e.
y^dx
i.e.
Ex.
i.e.
constant
it is
We have
a.
As x
3.
we
".
-^ =/>y.
To
find
y as a function of x,
Idy
So
y = epaj+l> = e
and
where a
is
an arbitrary constant.
epx
Compound
The form
<f>(x)dx
= aepx
+ $(y)dy = Q.
is
interest
result.
"
This case, in which the variables are said to be
separate ",
holds whenever the differential equation can be so arranged that the
DIFFERENTIAL EQUATIONS
419
coefficient of
only.
(x) dx 4-
\<f>
(y) dy
I
iff
= constant.
Ex.1.
two simple
integrals.
e*^=2*.
dx
2x dx -ev dy=* 0,
Here
32 -ey =a,
So
\xdx-\ev dy = constant.
i.e.
ev
i.e.
=x2 -a,
or
where a
Ex.
is
2.
y=log(z -a),
an arbitrary constant.
(y
-TT
So
dy =
x+h7 -^
y+k
Here
1 -e-
>
dx
C
-1 +
dy
^7
jx+h )y+K
log (#+ A)
Hence, writing
i.e.
log (a;
The integral
is an arbitrary constant.
of rectangular hyperbolas (see 3.7 above).
where
3.
The variable y
L and
/>
So
where a =e" b
increases as
L dy
*^
LJ prtf
log
is
= constant.
+ h) (y + k) = b.
where a
Ex.
<
T
/T^Y*
-=-px-b,
is
represented by a system
To
If*
i.e.
an arbitrary constant.
y as a function of x
L dy =
find
/V)*
After rearrangement,
%
420
(4)
It
The
"
exact
may happen
"
form.
Pdx + Qdy~d<f>(x,
and
is
y).
The equation
is
then said to be
"
<f)(x,
y),
exact
"
(x, y)
= constant.
The
1.
y dx + xdy=0.
The equation is exact as it stands and can be written d(xy) =0.
The integral is xy=a, where a is an arbitrary constant.
Ex.
Ex.
2.
(x
-y2 - l)dx+2xy dy = Q.
2
z _ (x -y l)dx + 2xy dy
2tf
and the
-~-
y
integral is
2,
j. 2/2 a. 1
=a, where a
is
an arbitrary constant.
So
as represented
fjfj
-~
by the system of
= -2vyy -f k
J*
__ k/'J/
circles
of Fig. 97.
-L. Jfi
Ex.
3.
We
dx
^=
:,
The
is
thus
integral
h-Jy +
This integral
parabola
is
a,
where a
is
shown by a system of
...
an arbitrary constant.
curves, each being the arc of a
DIFFERENTIAL EQUATIONS
x,
421
P
R
_
~
dxly constant
An
*i_W
ty~
__#
~
\dy/ x constant
is
'
thus
3z
and
where the functions / and g are to be associated with ( El
\
/
Q\
The cases where there are more than three
respectively.
)
-p
variables are exactly similar. Practical methods of the kinds indicated above serve to integrate particular forms of the total differential equation.*
Ex.
a and
/?
The
The
and
ox
dx
+
x
aj x + j3J.J:^J_J z
J
J y
Writing a =e~
=^
(6
an arbitrary constant)
Ex.
So
2.
i.e.
logf
^-J=6.
is
= axay^.
xdx + ydy+zdz=Q.
\xdx + ?/% +\zdz = constant,
I
2
J# + %y* +
i.e.
dz
dy -=0.
z
y
alog#4-]81ogi/-logz = &,
&
---=,
zoy
i.e.
y dz
-~-=a
and
xdz
So
in
lz*
= constant.
most ordinary
422
The
integral required
where a
Ex.
is
3.
is
an arbitrary constant.
2xzdx + 2yzdy - (x 2 +
Multiplying through
by
-^
2
/ )
dz = 0.
the equation
is
thrown into
"
exact
"
form
So
2
and the
16.3
The general
integral of
+y2
"
results,
The
first
linear
or
j|=/(*,
by the
functions
all
y)>
cases
P and Q, or
by the function /.
we can assume
that
all
when we pass
can be shown that the
complication arises
variables.
It
Pdx + Qdy+Rdz~Q
* See
de
fails
la Valise Poussin,
Cours
et seq.
more
pp. 139
to cases of three or
quite
Ed.
DIFFERENTIAL EQUATIONS
423
ordinary cases. The integral exists only if the functions P, Q and JR,
having continuous partial derivatives, satisfy a certain relation
which
is
We
+ 2yz dy - (x 2 + y 2 )dz=Q
dx + zdy + 2ydz = 0,
though quite simple in form, fails to satisfy the integrability condition and possesses no integral.
In diagrammatic terms, these important results imply that a set
of tangent lines in the plane
-~
Oxy with gradients given by (tx
=f(x,
y),
to build
up the planes
see
why
i.e.
to find a
set of surfaces to
fit
result.
(tx
to a non-linear differential equation. Example 3 of 16.1 illustrates this point. It follows that the constant can be separated off
i.e.
linearly
integral,*
i.e.
* In
fact, the curve system representing the integral of the differential
equation must be such that one, and only one, curve of the system passes
through each point of the relevant part of the plane Oxy (see 3.7 above).
<f>
can
The equation
(#
integral
= constant.
Here
</>(x,y)
coefficients of
dx and dy
in the original
differential equation.
It
is
</>
F is any
F{(j>(x, y)}
function, then
=.
also a
<f>
(x,
y)
y.
= constant
general integral
function.
Hence
is
constant
if <f>(x, y)
has a constant
P dx + Q dy = 0, then the
where
F is an arbitrary
constant,
one integral of
the integral
F{<f>(x,
is
= constant
y)}
is
--
x*
+ 2/ 2 + l =
x
const.
-(z
+ 2/~2-+ l)-2 =
x2
const.
log
^
- -x
e.g.
= const.
DIFFERENTIAL EQUATIONS
425
is satisfied.
= constant
integral appears
constant,
F{<l>(x, y, z)}
an arbitrary
function. The partial derivatives of $ are proportional to P, Q and R.
But the integral itself, as represented by a system of surfaces in
where ^ (x,
y, z)
is
is
Two
two functional
to
An
in space.
Ex.
we
heave
By
in
differentiating
dx
4-
dy + dz =
2xz dx + 2yz dy - (x 2
and
+ y2
dz
= 0.
we
2
2
dy _ ~~
_ x + y + 2xz
x -y
dz _
9Z
~~~
dx~
dx
find
dz
-dy
'
2z(x-y)
Further, the relations giving the differential equations can be arranged
to give any two of the variables (say, y and z) as functions of the third (x).
In the present case, we find
y=
},>(b
+ 4ab)-4:bx-4x 2 -
\b
and
z = =F W(6 4- 4a6) - 4bx - 4x 2 - x + a + \b.
These functions involve the two arbitrary constants a and 6. We can
now say that the derivatives of these two functions must correspond to
2
the values of
~
dx
differential equations.
^
differential equations is
But the
In dia-
shown by
426
of surfaces (one from each system) is a curve in space. The solution is thus
shown by a whole system of curves, not of the plane kind, but of the spatial
In the present
kind.
x+y+za)
space
dx __dy _^dz
P"<p:fl'
where P, Q and R are some functions of x, y and
sider y and z as functions of x we can write
z.
So, if
we
con-
dy
~=f(x,y,z)
and
dz
^ =g(x,
y, z),
O
ratios
p and
R
p.
<f>(x,y,z)=a
As
and
(f>
ifj(x,
and
y,
iff
z)=b.
In
fact,
= constant
and
G{*f*(x, y, z)}
= constant,
The nature of
this
further.
* See
de
la Vall6e Poussin,
DIFFERENTIAL EQUATIONS
427
first
of these functions, y as a
function of x, and the gradient of its tangent at Q is
indicated
~
Ct'X
by the
derivative
"
FIG. 98.
by
-jctx
The curve
in space
and
its
tangent at
can thus be
"
"
investigated by means of two shadow curves and their tangents.
Now, the given differential equations
dz
dy /./
v
= g (x, y, z)
=/(#> y> *>) and
-
-~
give values of
CLX
and
(tX
z)
of space, and so
"
is
of linear form
is
The
following examples
et seq.
428
"
On
(a
-~=-.
or
(16.2 above),
we have
= bx
(b
and
y=ax
shown by a system of straight
==
'
'
ydx
Similarly,
=-
dx
by ordinary methods
integrating this
y =a#
The
written
^2xz^2yz
= bx
is
thus
through O.
'
'x
2r
+y
It
many
others)
We
can
now
fdx
integrate at once
Cdy
- I
J
i .e.
The
= constant and
y
=
x
log y constant
log
J
and
x2 + y 2
+ y2 +~2z 2 = 6).
system of
Ex .3.
hold.
2 z dz
1
= constant,
lx 2
a systetp of planes
It
-f
+ \y 2 + z 2 = constant.
tt.,a
and
y=ax and
(x
x dx + y dy
"
The
can be
is
2z 2
= 6,
shown by a
ellipsoids ".
^
x
integral
-f
The two
.
2
+y
-f
~ dy
=
2yz
+y2 + 2xz
dz
2z (x - y)
x+y+z=a
and that of the second
(16.2 above) as
The complete
integral
is
thus
DIFFERENTIAL EQUATIONS
429
=0 and
give two tangent lines at each point
/
p\
(x, y)
-^) and
is
1,
are always perpendicular. Hence, the two curve systems representing the integrals of the equations must be such that, wherever
x
a curve of one system cuts a curve of the other system, tljef'two
curves are at right angles. Such curve systems are described as
orthogonal systems.
An example
x dy =
and xdx-ydy^O. It is
orthogonal type
that
the
and x 2 ~y 2 =b,
seen
are
integrals
respectively
easily
where a and b are arbitrary constants. The curve system, in each
is
given by y dx
-f-
xya
The
Oxy and
(x, y, z)
of space, and
its
gradients
430
are determined
by the
Q and
It.
The
pair
gives a tangent line at each point of space and its direction is determined by the functions P, Q and J?. It is a well-known result that
this
tangent line
is
horizontal line
-~
Oxy) with gradient referred to Ox equal to dx = -^
y
Ox equal
to
-=^
ax
=~
These two
lines in
Oxy
are perpen-
JL
The
by a system of curves
in space.
=_^ = ~
x
+ z 2 =c. The
a system of straight
through 0.
clearly orthogonal.
dy
y(-r) -2#-p4-t/=0
is
first-order derivative
and
is
2
/
-2ao; + a 2 =0,
DIFFERENTIAL EQUATIONS
where a
is
an arbitrary constant.
relation y=zax
we
obtain
+-
the
431
equation
first
x 2 ~r\ + x-~--y = Q
ax
and second
orders.
The
6,
which
integral of
an
as
illustration .f
Ex.
The
A man
The man
"
"
problem.
in
an open
field.
the
man
in Fig. 100,
Oy being the
dy
dx
MQ_ OQ-y~'
MP
x
So
*
shown
432
Let
=U
Now
s is
=arc
by man) = U = U
(y-x-/-)*
\
dX/
(distance travelled
ds_
dx
u\dx
d 2y
dx2
/Ay
dy\^
x d 2y
dxJ
udx 2
So
taking the negative root since the derivative
The equation,
is
is
dy\
^
^^
L
i
dx/)
To
-.
so that
dp
Since
-,
log(#
= u fdx
I
constant.
i.e.
=N/l +j9
'
'
2
+*/l+p ) = t* log a; + const.,
==
-j-
integrate, write
Then
i.e.
So
Hence,
negative.
-h\/l
+p 2 ~axu
^4)=0 when x
l9
Hence,
+^>.
"
3.-!* -,
SO
and
Hence,
and
1
2/
=1;
/f u
x
2\J
da;
f
I
or"* da;
-f
constant
=-1
/ cc1+u
(
ic
1"" 14
\
) -f-
2\l+u l-u/
6.
we
find,
DIFFERENTIAL EQUATIONS
433
at
At
'
of the distance OA
u^ /)
\ l
catches
if
is
man (u = \ ), the equation of the dog's path is y J (\/# 3 - 3\/# + 2) and the
man walks only two-thirds of the distance OA before the dog reaches him.
Similar complications arise in equations which involve the differmore variables. Further, when the number of
entials of three or
we can
_.
Ex.
dz
x ^~
dx
dz
-f?/^
J
= z.
dy
Write u =
so that
dz
From
a
So
we have
- x -~ - =
y
ox
_
**y
dzxdy -ydx =
dw-3
dy
^-3x2
that
is
y.
It follows
Z=i
where
2E
<f>
is
This
is
434
v),
(x,
then
some
is
linear
and
As an
is produced by
application of the result, suppose that a good
according to the production function x =/(#, 6)
using two factors A and
and that the product is always divided (without excess or deficit) according
to the marginal productivity law.
Hence, each unit of the factor A
and
dx
,dx
a^-+b^r=x
da
do
This
is
16.7
Dynamic forms
of
and homogeneous.
functions.
Under
static conditions,
assum-
ing that the prices of other goods are fixed, the demand of the
buyers can be represented by a function x = <f>(p) and the supply of
the seller
price
is now
dropping these assumptions in turn. The market price of
taken as varying over time, the current price being a function of t,
the time
(in
have to
find,
DIFFERENTIAL EQUATIONS
The
435
static
x = <f){p (t),
p'(t)},
x =f{p (t),
p'(t)} ,
For equilibrium over time, the price function p (t) must be such that
are equal at
all
times
the price
initial price,
In the
"
we
write
"
normal
a are positive.
linear.
Under static
and supply as x = ap+{i.
the constants a and j8 are negative and 6 and
demand
case,
as
xap+b
p =a
i.e.
436
where
positive.
This implies that a rising price, other things being equal, stimulates
both demand and production. It is possible, however, to take y as
if a rising price causes sellers to hold back their supplies.
a
For moving equilibrium, the price function p (t) must be such that
negative
Write
mr
Ihen
(0~A5
c-y
i.e.
(^),
- AQ
~-=A.
1
X=
and
q(t)=vlt)-p
p-
where
{p(t)~p}
j/():=
So
p(t)p+Ae.
=
where
p^-p. The
and
p= a-a-
A=-
c-y
and p Q
is
the
initial price.
If
y <c, A
is
is
positive
Hence,
and the
y>c,
is
(t
arranged for
t.
DIFFERENTIAL EQUATIONS
and was subject to the price then
moving equilibrium is now
and with
Such
linear
ruling.
differential equations
437
for
functions
66
When
there
equation for
is
p (t)
.e.
p has
initial
The multiple
is
the negative
number -
There
are three c&ses to consider. Suppose, for simplicity, that the prices
in the period (0, 0) oscillate about p, being as much below p at
0.
Then
as above p at
t
:
(1) If a
the period
(0,
0),
the
=
being the same as that at t 0. In successive periods
of 20 years, the same cycle of prices is repeated. The course of price
over time is illustrated in diagram A of Fig. 101.
price at
(2) If
= 20
a> a numerically,
cally less
*
On
than unity.
The
fonctionelles,
is
Economy,
438
shown
(3)
in diagram
If
a<a
B of Fig.
101.
20
40
30
is
50 t
20
30
40
50 t
20
30
40
50
FIG. 101.
diagram
The
scrutinised.
two goods
DIFFERENTIAL EQUATIONS
439
The function
R(x, y)dx + dy = 0.
or
-^=B(x,y)
The
differential equation
cases
all
Here
F is
<f>
y)}= constant.
(x,
y) is
"
indifference direction
defini-
"
fjfi
given by
--~B(x
dx
y)
at each point
defined
by
F{(f>(x,
y)}~ constant.
The
situation
is
exactly
as
We
do not assume a
before but based on a different assumption.
complete scale of preferences but a scale for small changes from any
given set of purchases.
with a constant value along any one indifference curve, follows from
our new assumption.
From 13.8 above, the function R(x, y) here defined is to be interpreted as the marginal rate of substitution of
for
X.
Previously,
440
The
is
the
is
sufficiently represented
by the
The assumption
and Z.
to be adopted asserts that the individual has a scale of preferences for small changes from a given set
X,
of purchases
(x,
Ax in the purchase
z)
of
dx as a multiple of
are positive
dx + Rl (x
or
y,
z)dy + R 2 (x,
y,
z)dz~0
not
is
difficult.
and
The ratio of
Y when the
dx\
= Ri(x,y,z).
-7-)
il
y' z constant
The function
is
The
differential
DIFFERENTIAL EQUATIONS
and we cannot assume that any
surfaces,
441
The assumption of a
scale of preferences for small changes of purchases does not imply that a complete scale of preferences exists.
The consumer can discriminate between small changes from his
shown up a new
The
where
possibility.
and
dR 2
-BR,
where
is
^^E^(x
<Px
<f)(x,
z)
= constant,
z)}
y, z)
and
$ z =R 2 (x,y,z).
<Px
The
map and
rates of substitution
As a
special case,
and deduce
map
the integrability
and a function index of
We
The
differential equations
-==-1
Jttj
define a tangent
-1*2
indicated
by
he prefers above
442
all
The
others.
preference direction at
indifference
map.
"
rapidly.
EXAMPLES XVI
Differential equations
1.
-r-
=-
sufficient
is
directions
-similar graph of -~
Check by integrating the equations
dx
x
"
"
the
variables separate
method (see 16.5 above).
Draw a
2. Illustrate
integral.
has a
From
maximum
3. If
y=
~
=
ax
and
by
its
=- ,
show that
(y
~ l)dx +
(x
l)dy =
0.
Conversely, show
"
variables
that the differential equation has the integral shown (using the
"
method). What are the curves represented?
separate
* Preference
two goods,
~= _
by the relation ax
dij
preference lines
by the
relation
R(x, y)
\\re
~ = -R(x,
y)
and
*^
DIFFERENTIAL EQUATIONS
Show that y
4.
is
a(x a)
differential equation of the system.
a to obtain the
-f
443
lines
and eliminate
The equation y
Find a
differential
7.
=e
(t
8.
9. If
Show
relation z
X
v
differential equations
is
that the curve system obtained can be represented in either of the forms
constant and x - a log x -f log y constant.
ye*x~*
n" 1 .
10.
Show
that y = aexn
11.
Show
is
an
integral of
13.
by
Show
that
Hence
3y.
dx
nyx
is
y = -1
^-
CMJ
left-hand side
14.
equation
-,*
-r
dx
15. Integrate
16.
is
Show
dy
-f
dz
= 0.
always integrable.
17.
Which
How
is
= Q and
are integrable
18. Integrate
an exact
19.
Hence
side is
differential.
derivatives of
Find the partial
r
a
integrate (y -f s) dx + a?" dy
+ *'
x+y+z
+ x*dz- 0.
with respect to
x,
y and
z.
444
20.
differential equations
z dz.
is
fixed multiple of x,
23. If y
the
is
i.e.
number of incomes
of
it is
known
Integrate
is
17 is
constant.
r,
it is
24.
The
lb., is
weeks.
The demand
is
oip
t)
p= b
B
a
is
26.
An
two goods
and
R=
where
given by ~r + k (p p)
px + a
is
utility function is
(x
Y for X,
is
defined
Show
that
show that
a, b,
DIFFERENTIAL EQUATIONS
28.
The marginal
fe
rate of substitution of
for
445
X R=
is
where
+ fry + y
tho coefficients are given constants. If a 6, show that one form of the
6, show that
utility function of tho individual is quadratic in x and y. If a
tho utility function noed not be of this form. Illustrate by considering the
particular cases of the two previous examples.
ocx
29.
Throe goods X,
"
independent
"
in
consumption
i/i
i^iR^fr-a):
(y-b):(z-c).
for
30. Tho marginal rates of substitution of
ratios of linear expressions in x, y and z, so that
and
are
known
to be
-=
(djX -t- b y + c^z + djdx + (a z x + b.2 y + c 2 2 + d 2 )dy + (ajc + b 3 y + c 3 z 4- djdz
the differential equation of the indifference plane. What is tho condition for
the existence of indifference surfaces? Show that the condition is satisfied
if foj ~a 2 c 2
6 3 and a 3 = c,. In this case, show that the utility function can
bo written as a quadratic in a;, y arid z.
is
CHAPTER XVII
EXPANSIONS, TAYLOR'S SERIES AND HIGHER ORDER
DIFFERENTIALS
and
17.1 Limits
WE
have seen
infinite series.
(4.1
sequences.
the second -case including sequences tending to infinity and
limit,
sequences which
oscillate.
For example,
3.
2.
2>
4>
8>
16>
^.1
1,
4,
9,
16,
...->>.
5.
are
2
~J and n
respectively
and
^l as n-><*>
2n
w 2 ->o>
as n->oo
integer.
A number sequence
members of the
and the
(n
written
down with
l)th
old sequence.
is
(to indi-
an
infinite
111
1
+ 3 + 5 + .+(2n-l) + ...
in
..
447
EXPANSIONS, TAYLOR'S SERIES
each case (n being a positive integer). From the definition, the sum
of n terms of the infinite series equals the nth member of the original
sequence.
So, for
any
11
111
+ .. .+(2ft-l)=ft 2
In general,
if /(ft) is
the nth
If the original
has
and the
limit of the
sum
is
the
The
sum
limit of
any sequence
(if it exists)
Any member
of the
sequence and the sum of any number of terms of the series can then
serve as an approximate value of the limit, a fact which provides one
of the main uses of a convergent series. If A is the sum to infinity of
a certain series, then A is given by the limit of the sum of ft terms and
found approximately by adding together a sufficient number of
terms of the series. This may be the simplest way of getting an
if the latter is a complicated expression.
the
sum
to
Again,
infinity provides an approximate value of the sum
of a large number of terms of the series. The sum of (say) 100 terms
approximate value of A
that the
value of the
sum
geometric
series
consists
(or
decrease)
common
448
In general,
ratio.
the series
the
if
term
first
is
-f
r,
. . .
It is
ratio
is
is
is
thus
n
numerically less than unity, the expression r becomes smaller
and tends to zero as n increases indefinitely. Hence,
If r
is
a
a
a
---- rn -> -----r 1 -r
l-r
as
The geometric
convergent with
sum
to infinity
--
pro-
vided that r
rn
series is
is
not convergent.
oscillates.
1
_,
Ex.1.
a=
Here
+- + ....
+ +- + ...
5
|,
8n -
and
The
series is
sum
convergent with
= 1 - ^->1
^
^2
**
"~
is
Y
A
is
~~
Ex.
a convergent geometric
Q*
/
3.
way
of writing the
sum
with a
series
=r
^.
The sum
An
as TI~>OO
income stream of
starts
is
to infinity
(M.
years. Reckoning interest yearly at lOOr per cent, per year, the present
value of the stream (see 9-7 above) is
?i
l+r
a
+ ______
/i
..\o
1+r
I
i
__________
/i
..va
V1W
1
^ITr
a
\
'
^^
_
,
af
r\
VI +r/ /
\1
449
If the
of
100
is
is
if interest is
per year.
appears
It is easily
Since
S n ->
oo
as n-+<x>
never possesses a
Ex.
1.
sum
Here
is
to infinity.
Here Sn = \n(n + 1)
Ex.2.
is
the
sum
of the
first
positive integers.
of the
first
n odd
positive
integers.
17.2
By
we
find
xn+l
1
-X
-X
If x has a value numerically less than one, the term containing x n+l
decreases and tends to zero as n increases indefinitely. Hence,
if
is
numerically
-x
less
than one.
We
as
infinity equal to
IP
~~"
the formula of
X (by
17.1).
M.A.
450
x by long
j.
we
If
is
division,
by adding a
if
is clear.
sufficient
x=
-=
30
Hence
= 1-03448.
places, ff = 1-0345, as
division.
The
fifth
i.e.
for
-x
j.
can be replaced
to infinity.
2
3
(to infinity),
f(x)=a Q + a^x + a zx + a 9x +
where the a's are certain constants. The problem is a little complex
. . .
since
we have
carried out at
valid
and
first
all,
coefficients.
The
limit of the
suffice,
by a quad-
x when x
is
451
is
at
complicated.*
up
to
We
start
with a simple case where the problem is really solved in advance but
which will indicate the more general method. Suppose that
2
n
f(x)=a Q +a1x + a 2x + a zx* + ...+ anx
known
By
values.
f'(x)
have
successive derivation,
f"(x)=2a 2 + 6a 3x +
...
+ n(n - l)an xn ~ 2
=n(n-l)(n-2)...3.2.
Putting x
coefficients
lan
0,
and
f(
la n
factorial
and written
In.
*o=/(0), <h=J
The
original polynomial
/7<2
f(x) =/(0)
+f(0)x +/"(0)
+/'"(0)
+ ... +/
xa
~ + ...+/M (a) ~ + Bn
[^
(x),
452
where
Rn (x)
and the
is
the difference, or
"
remainder
The fundamental
series written.
between f(a + x)
",
result
that
is
xn+l
where 6
is
a positive fraction.
Rn
In other words,
x)
is t>he
term we
*K**
is
some point
illustrate (in
diagrammatic
portant
is
zero.
is
Let
be points on the
curve with abscissae a and
at
all
and
FIG. 102.
has gradient
referred to Ox.
is
(a
+ x)-f(a)
it
f(a+x)=f(a)+Ro(x)
i.e.
and our
*
result for
Tho
7i=0
is
where
(x)^f'(a
+ 6x)x
obtained.f
is
complex.
The result when n = is known as the Mean Value Theorem and its
"\
meaning can be expressed as follows. Tho mean increment in the function
f(x) for the increment in x from a to (a + x)
x
is
As #->a,
this
ratio tends to/ (a). Our result shows that the ratio equals the derivative of
f(x) at some point between a and (a + x) even when x has not a small value.
453
we
infinite series
obtain
is
convergent and
we have
oo
).
On
we
obtain
is
The function
orders at
a:
a.
all
/y.2
f(a + x) =f(a)
\
where 6
is
some
positive fraction.
Further,
~+
...
+/<>()
-+
...,
L*
for
ft -f-
as
~T~
are
xa
f(x)
and
its
derivatives at
xa.
454
neighbouring point. The particular point #=a, in the neighbourhood of which the expansion holds, can be chosen at will. By
selecting different points
we
(* =1 )-
f(i+x)=f(i)+f*(i)x+f '(i&+...
Finally, it
is
values of x.
panded
for
+ x)
most favourable
case).
17.3
(the
most unfavourable
values of x (the
all finite
The most
Ex.
= xr
If f(x)
1.
In general,
(r
any
number), then
real
Taylor's series (a
= l, n = l)
...
(r-n + I)x
r ~n
gives
~
where X = \r(r -1)(1 +0x) r 2
is
finite
r(r-l)
r--
...
--
provided that
-0
zero.
The same
result holds,
but
is
more
difficult
to
r(r-l)'*2
- --
r(r-l)(r-2)
-
...
...
(r-n + 1)i
for
is
455
E.g.
=1
= 1-0488
The
fifth
Ex.
series
2.
term of the
series is
Hence, by Taylor's
with a=0,
Rn
provided that
x)
increases
any
xn
x
x
_
+ -- +
The
...
...
+ _ + ...,
=-e**->0 as n->oo
finite
series written
infinity.
it is
The
called the
exponential series.
If x is small, the exponential ex can be replaced approximately by the
2
3
quadratic (1 + x + 1# ) or by the cubic (1 +x + \x* + &E ). The latter gives
=
a degree of approximation represented by x4
E.g., if # 0-1, the
cubic expression certainly gives ex correct to three places of decimals.
We must include more terms when the value of x is larger or when greater
ex to
accuracy
is
required.
Taking x = 1,
it is
series
" 1+1+
+ '''
+
Jl
jl
gives e correct to five decimal places when ten terms are added. Noting
that each term can be obtained, as a decimal, by dividing the previous
456
term by
2, 3, 4,
...
places as follows
= 2-5
+ 0-166667
+ 0-041667
+ 0-008333
+ 0-001389
+ 0-000198
+ 0-000025
+ 0-000003
= 2-718282
i.e. e
=2-71828 correct to
Ex.
3.
If /(a)
= log z,
A*)-?
In general,
five
decimal places.
then
/"(*)- -i*
f(n) ( x
=1
)=(- 1)"-
En (x) =(-!)
if
is
..
\n-l
*===
+ ...+( -I)"-1
n+1
^j =
<
+-,
- *)"
series,
-p.
gives
a;-+-provided that
/'"(*)
than one.
...
+ xt,b+yt)=f(u,v)
Write
<f>(t)=;f(a
Then
f(<)==+
r
du
dt
dv dt
du
(u=a + xt,
dv
v = b+yt).
above)'
(13-4
v
finite
.,
>
<
~X
and
so on.
df
+
)=(a;d/u,
_ ~
5^
d
dfdfL
=*T(
dt \du/
df\
L
dv\
d*f
+y
dt)
457
dt
I 3 2/
d/u
dv\
\dudv
~dt
dt)
In general, we find
+ nxyy n ~ l
,
d f
^^
dxdv"-
Sn
f
+ yn ^n)
,
dv
where the numerical coefficients follow the " binomial " form
indicated above (17.3, Ex. 1). By Taylor's series for <f>(t),
/n+1
fn
f-2
Putting < = 1 and substituting the values of ^ (t) and its derivatives
= 0, so that u=a and v = b), we have
(all evaluated at <
f(a + x,b+y)=f(a,b)'
uju
c/t*/
c/
a,b
uy
'aft
where
little
and y in the partial derivabut not in the powers of x and y included in the
terms.
Thus
'
+2'
=xfx
(a"
a b
and
Rn (#>
y)>
in the (n
+ l)th
458
We
Rn (x,
provided that
This
is
y)->Q as ?i->ao
series
and
of x and
contains
first
orders.
Ex.
provided that
(0, 0)
Rn (x, y) =
y'
v
.
\L
6 <*+*)->()
and y
series,
as 7&->oo
(as in 17.3,
Ex.
2).
So
11
459
if
a 2/
...+2xn _1 xn
a 2 /"
\
n / aiaa
is
...
an
Our
results are
The function
-/(a)
It
is
is
f(x) has a
maximum (minimum)
all
value at
x=a
if
small values of x.
derivatives
for
is
any
(1)
form of the
series
By the continuity of the derivative, /'(a + Ox) has the same sign
as /'(a) for a certain range of small (positive and negative) values
of
x.
Now
f(a+x)-f(a)=f'(a + 0x)x
(n = 0)
sign.
The
(2)
As
before,
positive
But
(n
i.e.
f(a
+ x)
i.e.
of /"(a).
= l),
Hence,
- f(a) =f'(a)x+/"(a)
sufficiently small
~ +/'"(a + fa) ~
If
If
=/"'( + fe)s
(n = 2)
shows that/(a + a;) -/(a) changes sign as # changes sign. The point
xa, which is a stationary point, is thus a point of inflexion and
does not give an extreme value off(x).
(4)
Suppose/'(a)-/-...-/ (w
now be
- 1)
()-0, /
written
Of the two terms on the right-hand side, the derivative has a constant
sign,
that of
and
values of x.
integer
/ (n) ( a )>
is
always positive
if
is
sign with
an even
integer.
if
is
an odd
In the former
is
negative or positive.
Hence,
x=a
then/'(a)
= 0.
//
/'(a)=/
(a)
= ...=/<-D(a)=0,
461
then f(x)
an inflexional value if
/<">(a)^0,
There
sufficient.
is
no case of
failure
is
maxima
is
The
derivative determines the nature of the point considered.
values
method
minimum
of
maximum
and
(8.4
practical
finding
the
as
that
of
a
few
affected
doubtful
cases
is
(such
above)
scarcely
;
is all.
y = (x-\)*.
Ex.
J-^-W S^
up and that
12
1 )2'
g-^*-
and
1)
g-24.
There
is
Hence, /==0
is
minimum
it is
zero
when x = 1.
The
"
differential of
"
variables.
The need
is
met by the
The function
z =/(#, y) is
assumed to have
finite
The
and continuous
first-order variation
462
described by
is
*5
dz=~ dx +
ox
and
and
and
dx
But,
if
dy
way and
is
d 2z=d(dz).
dnz=d(dn ~ l z).
As
we need
Unlike the expression for dz, which is the same in all cases, our
results for the higher order differentials are different and simpler
when x and y are the independent variables than they are in other
cases. The reason for this is not far to seek. In differentiating dz
to obtain d 2 z, we must know how to treat the dx and dy appearing
If x and y are independent variables, dx and dy are constants
and do not worry us. In other cases, this is not so and due account
must be taken of the variation of dx and dy in the differentiation
in dz.
process.
to
know whether x
variables.
and
are
independent
it is
or
essential
dependent
463
variables.
two inde-
dz\
dz\ . } _
fa /az\ .
a tdz
y\ dx +\^r
r {*-)
5- } dy
*- dx +T' UdxJ
dy\dxJ
\dx\dy)
\dx\dy
ty\d
j
a
dx\dxJ
7
O
77 + . 7 2O
2
d 2z = 5-5 do;
+ 2 ^-5- dxdy
y
2 dy
dx*
dxdy
dy
rt
i.e.
The
essential point
constant increments
is
that
rfx
(#, y)
in question.
The
z=
= 2 (x + y)dx + 2 (# - y)dy
Ex.1.
Here
and
dz
d2
= 2(dx 2 +2dxdy-dy 2 ).
2
z=
Ex.2.
Here
dz
x-y + I
^(x -y + 1) 2
- 2xy + 2x) dx
,2
(x-y + 1)*
{(y-\)dx-xdyy
464
z=l
Ex.3.
Here
dz
x2
+y 2
2
&
U>
(x +y
+y2)-2(xdx+ydy) 2
2
2 2
(x +y
)
(dx
(y
+dy
)(x
(x
- y2 dx 2 + 4xy dx dy )
(x
- y2 ) dy2
to give
dxdy
ty*
/9^Z
Tfiv
i.e.
f/
=-
arr
Ac 3 H- 3
ox* oy
^?
dx 2 dy 4- 3
3Z
/5^2
=--; rfx
ox oy 2
2
dy + -
dy
^v
3
-
This
law
Ex.
(17, 3,
1,
above).
We
y + k)-f(x, y )=
d2-z
d*z
li
if
where the
differentials of z are to
variables from
dz,
d 2z
d*z,
...
(x, y) is
,
of the function at
h and
k, i.e.
"
"
they are of higher order of smallness
if
h and k are
465
small.
mation Az
dz
Mz
and so
on.
differentials of
differen-
d*y=f"(x)dx*, d*y^f'"(x)dx\
dny = / (n) (x) dxn
dy=f'(x)dx,
In general,
The
first
...
derivative, as
The second
we have
dy
derivative
is
dx
justified.
In the function
zf(x
y),
. . .
=d
-d
**+
dz
a^2
dx
.e.
,,
^T"
dx 2
The expression
fdz\
dz
a~a~^
\dxdy
dxdy
for d 2z
now
+d
dx
dxdy
*>
includes
dy
a^2
dy
dx
iT
dy
dy
M.A.
466
Two
Prom
we
(13.4 above)
dz __ dz dx
dz
dt~ dx
dy~dt'
dt
+ 2^dxdy +
d%=^dx*
dx
dxdy
dy
2
dy
derive
2
<fady
+ d^zfdy]
*
2
dxdydtdtdy
The
ratio of
d 2z to
\dt
dzdtx
dxdt 2
+ dzdty2
'
dydt
dt 2 is to
of z as a function of
In particular,
if z
f(x, y)
d?z__<Pz *
and by finding
where y
is
dz dy
dx
dydx
dx
derivative directly.
a function of
dz __ dz
d 2z dy
its
cPz
^dy
/dy\
\dx)
x,
dzdfy
'
dydx
x is the independent
variable.
~T
y)
= 0,
Differentiating again,
jv
467
If the value
fj4J
of
~j-
doc
previously obtained
(13.5 above)
If the
then
is
same
is
again obtained.
relation
fxdx+fy dy
is
Q gives the
dx
first
derivative
dy
find
y,
and from
-j-
Jx
+2/f"
+
dx
dx
+f ( Y\
+Jxx
dy
\dy) }
'
dx
-=-
dy
dx
and -=- are
dx
dy
reciprocal, the same relation does not hold between the second
It
is
first
derivatives
derivatives.
is
dependent
Taking y as
a*
dx
=,
we have
x,
.--.
dx
y
Differentiating again,
d 2y
l 'e '
But, taking
If
d^~~y\
a;
L+ fo
\dxJ
J~
as a double-valued function of
=.
dy
y,
.dy
and
dy/
If,
/dx\*}
la: 2
16
468
Ex.2.
Regarding y as a
triple- valued
function of x,
Differentiating again,
Similarly, if
is
a;
dx ^
-x
d?x
2xy
__
dx*
52
+2
dxdy
dy
dx
dy
ffiy)
I
32
As a
= f"(x)dx*+f(x)d*x,
....
is
if
a;
is
dt
dt
t,
'
469
'
dt*
dt*
dt I
This
is
EXAMPLES XVII
Infinite series
1.
infinite series of
Show
expression.
is
convergent to
is
\2
--- )
1/
i.
Find the infinite series with sum of n terms given by (a) n 2 (n-f\n(n l)(2y& + 1). Show that neither series is convergent.
2.
(6)
n+
given by TEis
1)
and
-t-
3.
4. It
is
known
that
TT
is
the
sum to infinity
*(i-i+t- ++*-A+...).
Find the value of
5.
Show
tr
that *J2
the
sum
t{i--H-i(i) 2 -A(i) 3 +
and deduce the value of
-..},
(cf.
n,
Ex.
3,
i.)
6.
7.
infinity of
sum
to infinity
by
finding the
sum
of ten
geometric
series.
If the distance
is
2h,
show that
An
income stream, starting with a next year, is such that each year's
half that of the previous year. Adding interest yearly at lOOr per
cent, per year, find the present value of the stream flowing for n years, and of
the stream flowing for ever.
9.
income
is
10. An income stream starts next year with a and flows for ever so that
each year's income is a fixed percentage (100s per cent.) less than the previous
year's income. Find the present value of the stream, adding interest yearly
at lOOr per cent, per year.
470
Expansions
11. If 6
+ x)
log ( 1
is
some
-{
uX
12.
show that
series
(n=
1),
show that
less
13. Write /s/6 = |- \/25 - 1 and use a binomial series to calculate its value
correct to five decimal places.
14.
Put
small.
to
==
when x
is
vl + #
By
17.
By taking
Je and
18.
sufficient
is
the integral of
(1
series, find
4-
a?)"
What
the values of
Show that
exceeds s by approximately
&n
sa
20. If interest at lOOr per cent, compounded yearly and at lOOp per cent.
z
compounded continuously are equivalent, show that r - p = %r approximately
when r is small (cf. Examples IX, 26).
21.
(m)
first
(a) simple,
is
by
(6)
compounded
small enough
2
t(rn) and the second
by
Jr
n approximately.
471
22.
<f>(x)
on
pa)}.
{ptf)(x -hi- pa) + (1
p)<f> (x
small, use Taylor's series to show that the expectation gives less
utility than the original income x.
(See Marshall, Principles of Economics,
8th Ed. 1927, p. 843.)
If the bet
is
By
23.
series is convergent.
series for
Expand, by Taylor's
24.
pression
linear
-\-
Higher order
25.
mum
differentials
that neither y=(x~ I) 3 nor y (x - I) 8 has a maximum or minivalue and that each has an inflexional point at (1, 0).
Show
Find the
26.
partial derivatives,
x*
2
-y
~
ex v
and 2 = log
27.
z
small.
----
y -f
and
differential of
log (x
each of
first
+y
two
differentials, of
2
).
x 3 + y* - 3xy 9
z = */x*
+ y2
29. If z =
x+y
where x = e* and y
e**,
evaluate
d 2z
~r-r
cut*
for variation of x
and conversely.
Illustrate diagrammatically.
(See
Example
XIII, 22.)
31. The relation f(x, y, z)
gives z as a function of x and y. Differentiate
the relation and obtain the first and second order partial derivatives of z in
terms of those of /. Illustrate by taking the relation x 3 -f t/ 3 4- z 3 - 3xy = 0.
*
(See
Examples XIII,
23.)
Ix dy du ou
dy* \ou
dz d*y
dx &u*
dy du*
and similar results for the other two partial derivatives of the second order.
33.
From
and y = ~.
Express z explicitly in
CHAPTER XVIII
DETERMINANTS, LINEAR EQUATIONS AND
QUADRATIC FORMS
The general notion of a determinant.
DESPITE its somewhat terrifying name, a " determinant " is a
mathematical tool of a very ordinary kind and involves no new
18.1
tities.
are
for them.
is
justified
on these grounds
alone.
There
is,
minants are seen to obey quite simple rules and the algebraic processes in which they appear become simpler and more uniform than
before. As a consequence, results can be established which would
almost certainly be missed were it not for the new notation. It is
it
before.
473
du
du
dx
dy
Sv
dv
-r
-r
ox
dy
x2
xy
xz
yz
yz
z2
and
:
and **
xz
is
called a determinant of
speak of the elements of the first row or column, of the second row
or column, and so on. Each element is allotted, of course, to one row
and to one column.
general
quantities
making up
From
a determinant
is
required.
an
a12
6^3
...
aln
where the integer n denotes the order of the determinant. The two
an element denote the row and the column into which the
element is to be placed. Thus, a 53 is the element to be inserted in
"
"
the
at the intersection of the fifth row and third column. It
cell
must be noted, however, that the notation is designed for dealing
in any particular case the elements
with determinants in general
appear as actual numbers or quantities of one kind or another.
suffixes of
18.2
The
good working
For a more
strict
and general
be given in suc-
is
Die Determinanten
474
"
"
defined as taking its value from the
cross multiplication
of the
four elements which compose it and we write
#11
#12
#21
#22
1.
= 2x3-(-l)xO
-1
Ex.2.
Ex.
3.
a
h
=ab -h2
x*
2xy
Ex.4.
=axb2xy
2
y
du
dx
du
dv
dv
dx
dy
dy
= x*xy*-2xy*2xy= du dv
dx dy
du dv
dy dx
'
y.
This determinant,
is
A determinant
#21
#31
#32
is
y.
#22
#23
#32
#33
~#12
a 21
^23
#31
#33
+ #13
#21
#22
#31
#32
#33
+ #! 3 (#21#32~#22#3l)
475
element comes from each row and one from each column. Further,
half the terms are added and half subtracted to form the algebraic
sum.
Ex.
1.
-2
-1
-103
-2
-2
-2
-1
-2
1
=
(0
+6)
Ex.2.
Ex.3.
Ex.4.
d(x,y,z)
This
and
is
it
then defined
right-hand side and collect terms. It is then found that the determinant denotes the algebraic sum of 24 terms, each term consisting
of four of the total of sixteen elements so chosen that one comes from
476
in the
down
in terms
a 22 a 23
%n
a 2n
a 2n
#22
...
a nl an3
...
an
a nn
...
The
signs of the successive entries on the right-hand side are alternatively positive and negative until all the n elements of the first
The (n-
is
algebraic
sum
is
elements selected so that one element comes from each row and one
Half the terms have a positive and half a
negative sign.
in the
sum
is
\n=n(n-l)(n-2) ...3.2.1,
is very large when the order of the determinant is high.
The determinant notation as written above can be sometimes
which
abbreviated to
|
where a r8
is
a r8
(r
and
a typical element
= l,
2, 3, ... n),
(in
sum
determinant, therefore, is
of terms which are products of the elements of the determinant
and
its
value
is
(e.g.
numerical or a function of
compose
it.
The
practical
way
and
477
determinant
are transposed
unchanged in value
is
if its
au
nl
..'
^21
^22
^23
#wl
#n2
tt n3
^2i
nn
#lw
#2n
#wn
#3n
e.g.
^11
fif'i2
..
^13
"^
^ln
^'11
^12
#13
#lw
e.g.
kan
ka lz
ka13
...
kaln
% 21
a 22
a 23
...
a 2n
(4)
(5)
=k
an
al2
13
...
aln
sum
row
if
(or of
a12
e.g.
anl
2n
ln
<*>
a12
(6)
'
aln
is
478
the elements of one row (or of one column) is added to the corresponding elements of a second row (or of a second column)
:
e.g.
2
nl
To make
clear the
properties, it is a useful
exercise to verify that they hold in the particular cases of second
and third-order determinants. It is also a relatively easy matter
meaning of these
to give general proofs, using properties of the values and signs of the
terms in the expanded form of a determinant (18.2 above).* The
practical evaluation of determinants
is
often simplified
by using the
and
a combination of
Ex.
Show
1.
that
456
789
-0.
(6)
first
with k
333
666
The same
rows from
Ex.
2.
= 6,
third
= - 1.
by property
(4).
left
Express
in factorial form.
c2
the
first
Similarly,
is
factors.
"
and c,
it
of the determinant)
diagonal
value of the determinant
is
479
order one less than that of the original determinant. The derived
determinant is called the minor of the selected element in the given
determinant.
and each
is
A
\
a rs
an d
= 1,
2, 3, ...
n)
The
A r8
as obtained
quite simple.
If the
element add to an even number, then a plus sign is given to the cofactor
if they add to an odd number, then a minus sign is allotted.
;
The
co-factor of a rs in
is
denoted by
A rs =A rs
- A rs
It
is
A rs where
if (r
+ s)
is
even
if (r
+ s)
is
odd.
Our
minors or co-factors.
A=
\
or
i.e.
We have
a r3 \=
+ #12^12
value of A equals
=#11^11
the
the
sum
first
row
any row.
#21 -^21
+#2n^2n
#2fAn)-
480
The bracket on the right-hand side is, by the definition, the value
of the determinant obtained by interchanging the first two rows of A.
The bracket thus equals ( - A) and so
A =a 21 A 21 + a 22 A 22 +a 23 A 23 + ... + a 2n A 2n
Again, take the sum of the elements of one row of the determinant
each multiplied, not by the corresponding co-factors, but by the
co-factors of the elements of another row, e.g.
a 21 A n
This
A
sum
in
+a 22 A 12 +a 23 A 13 + ...+a 2n A ln
sum must, by
identical elements.
The
By
property
now
(4)
of 18.3, the
established
sum
zero.
is
The
first result,
expansion rule
property (1) of 18.3, the results are true also for the elements of any
column of the determinant.
defined.
omitting the two rows and two columns containing them, a secondorder minor is derived as a determinant of order two less than that
of the original determinant.
The process can be continued by
selecting more and more elements and omitting the relevant rows
481
variables.
The determinant notation serves to express precisely the properties of linear and homogeneous functions of more than two
variables. Let y=f(x1 x 29 # 3 ... x n be a linear and homogeneous
function with continuous partial derivatives of the first two orders
)
and
= --
and
(r
dx r dx s
l, 2, 3, ... n).
it
1A
O.
1*
IJ IT
O*
- 1
-i.
'"
2i7 27*
'
'Y1
f
3j ST
-1
~*
* *
-P
/y
^71
'
./
f\
7~w
= l,
(r
O\
l^'l
2,
3,...n).
The n
relations (2) arc extensions of the results (4) of 12.8 and give
each direct second-order partial derivative in terms of the crosspartial derivatives.
Let
FQ
/2
/3
fl
fll
J12
/13
fin
f>
Jn
Jin
/an
/3w
Jnn
frs
in
F Q (r and s = l
^o =
J 0ff =
and
The proofs of
(3)
and
lation of determinants
(4)
(Al^ Oll
fn
in
and
2, 3, ... n).
F Qrs
the co-
Then
(3)
-*^F
(4)
2H
..-
- -
1, 2, 3, ...
n)
482
By
is
F Q and the
coefficients
for
j?
F ~ 0.
i.e.
by
by
18.3, (3)
18.3, (6)
adding x 2 times the elements of the third row, x 3 times the elements
of the 'fourth row, ... to the elements of the second row and using
(1) and (2) above. Expanding in terms of the elements of the second
row and applying a similar manipulative process all over again (with
columns instead of rows), we find
!=-*
Hence,
F oll =
4* z
- F, which
l
is
(4).
The other
y
results follow by similar reductions of F.
18.6
The
is
equations, operating with quadratic forms and making linear substitutions. We propose to give here some account of the use of the
first two problems.*
For applications of the determinant notation to
Netto, op. cit., pp. 77 et seq. and pp. 100 et seq.
notation in the
*
483
this tells us
The
=c
in
two variables
all
the equations
and
is
and
02
The
solution is unique and appears in terms of second-order determinants involving the coefficients of the equations.
To generalise the result, consider a system of n linear equations
in n variables, xl9 x 2 # 3 ... x n
,
11*1
21
The given
'
12^2
022
of J, and add.
Then
By
484
by the column
(e^,
A when
a2
...
the
first
column of elements
and so
where A
is
The
result
second, third,
for
unique
>
first,
is
replaced
an ), so that
llL
The equation
is
verified as
Ex.
1.
The equations
give
1
-6
-134
Ex.
2.
(14.8 above),
we had
Pa
+p a v --p w^=
dp
We
and
result.
can now
If
485
form
The
first
-n
since
first
column, equals
(PaPb
- PaPb) -
xp = apa
u
-f
bp b
y-
PaPb)
Hence,
xp
-~
XP
db
and
(w
==
An
expression which
-- (n - a).
ab
the
sum
variables.
of a
is
we can offer.
The general expression of a linear form is (ax + by), (ax + by + cz),...
when there are two, three, ... variables. Here a, 6, c, ... are constant
486
coefficients.
The general
(ax
+ by
quadratic form
4-
diffi-
is
2hxy),
. . .
according to the
difficulty in dealing with such forms
With two
variables,
we can
F(z, y)=
"
(ab
- h 2 ) in
and
>0
and negative for all values of x and y (other than x~y = 0) if,
and only if, the same expressions are negative and positive
respectively.
may
and
(ab
- h2 )
positive.
The
is
that these
487
dition
to cases of
determinant used
+ hxy
+ hxy -h by 2
F(x, y)~ax
The determinant
is
(h
x+
(h
~\
~\
-\
2
g \
y-\
z]
h2
ab
f
I
-\
-\
af
r
ab
~\~
&
gh
af
yz
gh
,-;
n*
2
2
-ch 2 + 2fgh 2
z
+ abc-af -bg
ab~^h?
"
where we have
F (x,
if,
y, z)
is
and only
twice in succession.
Now,
positive for
if,
"
'
(ab-h
i.e. if
and
2
)
(abc
af
- bg 2 - ch 2 42fgh)
i.e.
if
is
ff
and negative for all values of x, y and z (other than x=y=z Q) if,
and only if, these expressions are negative, positive and negative
respectively.
488
easily derived
F (x,
is
arranged
ax
y, z)
2
-f-
hxy -f gxz
+ hxy + by 2 +fyz
2
+gxz+fyz -fez
problem of the same nature
.
more
that of finding
the conditions under which a quadratic form preserves a given sign,
not for all values of the variables but for values satisfying a given
restricted
is
solving this
problem is quite simple. The linear relation gives one variable in
terms of the others and the quadratic form is then reduced to a form
in one less than the original number of variables.
The previous
results apply at once. Suppose that the two variables of the quadratic
form (ax 2
-f
by
2
-f-
form becomes
and
c.
Then
+ /fy
y~
0,
where a and
j8
~p
is
if,
-f-
a
a
h
<0
h
b
if,
and only
if,
the deter-
is obtained from the discriminant of the original quadratic form by " bordering " with the
coefficients a and /J from the linear relation.
form
ax + fiy + yz = 0.
Eli-
minating
x=
where
A=~(W
are related
a (j8?/
=
r
and
A>
(be
+/<x).
and
AJ3-H >O
-/
)a
+ ay 2 - 2gray)
(ca
(afy-g*p-
The form
and
489
z (x
i.e. if
=Q
if,
(ax
x y and
9
and only
4-
by
z (other
than x = y
0)
<0
is
positive
which
satisfy
if,
|<0 and
j8
if,
the two
all
zero
values of x, y and z
for
-1>0
and
2
i
f>0.
490
Ex.2.
(x
negative for
is
+ 2z=Q
all
values of x, y and z
since
-KO.
Or, eliminate z
But
(3#
= - \ (x + y) and
+ lOxy + I ly2 )
and
2/1? 2/2
an d
and y
is
3>0
Ex.
is
11
since
= 8>0.
values of x and y
all
2/3
and x3
such that
=
9^'
3a? 2
It
is
d#3
9^2
92/2
+
is
negative for
dx l
i.e.
all
* See
+
9a; 2
dx,^ dx3
9a: x
9x 2
32/2
3?/ 2
~~
,
>0
2~
cfaJ
8
9o:3
The conditions
are
and
and ^
OX-\
OXn
3|/2
OX*
3^2
3^2
9^ 9^
9# 3
3^3
3^3
3^3
dx l
dx 2
dx3
are negative, positive
respectively.
Ramsey,
1927, p. 50.
dx,l dx3z
<0
the Jacobians
and negative
dxl
Contribution
to the
Two
491
F(xv x 2 # 3
,
... a?n
The
+ 2a12xlx 2
-1-
2a13xlx3
-f
. . .
x 2 x^
,
...
xn )
= anx^ + a12x x 2 +
K..+annsw '
where the
suffixes
written
a's
is
down from
We
need the
also
"
bordered
"
determi-
nant
OC
OCj
OL n
. . .
is
said to be positive
definite if it takes
now be
stated
(1)
A and
a n >0,
is
positive definite
nl
is
negative definite
if,
if,
and only
if,
i.e.
>0
^22
22
(2)
Two
is
an2
492
if,
A' and
all its
if,
and
i.e.
<0
aln
and the form is negative definite under the same conditions if,
and only if, the above expressions are alternatively positive and
negative.
The proofs of
(2) is
is
relation.
EXAMPLES XVIII
Determinants
= abc + ab + ca + be.
Show
that
= 4abc
b
c
Show
that
if (e.g.)
(18.3, (3)
and
(6)).
-1 -1
Deduce that the determinant equated to zero gives a cubic equation
with two roots x = a and a third root x = - 2a.
in
Prove that
a*
62
c2
a - 1
63 - 1
c3 - 1
3
-(a&c-l)
62
Ice
493
(18.3, (2)
and
(5)),
Factorise
8. Write down the co -factors of the elements of the second and third rows
of the second determinant of Example 1 above and verify the results of 18.4
in this case
:
(1
9.
+ a)A 21 + A^
Shdwthat u = ax
and
1 23
(where a 4- /? + y
'
(1
du_a,u
dx~~x'
a(a-l)w "
'"
"
'
d zu
ctflu
dx dy
xy
'
Linear equations
10. Solve 2x - y =
11. If a, 6
and
3y + 2z =
2,
c are
where
13.
a, 6
and
From
3z
+ 2/ + 3=-=
1,
x-y + z
a,
and
+ 5x = 21.
x+y+z
12.
16
18.3,
Ex.
b
2,
and
x -\-y-z
c.
ax + by + cz = d,
a 2 jc + b*y + c*z
dz
c are constants.
+ d^ - 0,
'3^0,
A*
A3
A4
at
6j
cx
rfj
494
14.
satisfies
aa
6a
c2
*>3
C3
o*
CA
a
This
sistent.
is
provided that
d2
dB
d
the condition that four linear equations in three variables are conGeneralise it.
Quadratic forms
that (4xy - 2x 2 - 3y 2 ) is negative definite and (x 2 + y 2 + z 2 - yz)
positive definite for all values of the variables (not all zero).
15.
Show
is
2
2
2
17. Show that (xy yz + xz- x -y - z )
the variables which are such that x + y + z
-}-
18. If a,
(ax
-f
b, h,
2
by + 2hxy)
a
is
is
0.
and
to
ocX
indicate the relation of the conditions for relative definite quadratic forms
to those for unrestricted definite quadratic forms.
CHAPTER XIX
THE
definition of
/(^-fo^, a 2 -h# 2
...
<* n
+xn
variables has
-/(%,
... x n
2>
a n)
...
negative
xn =a n
if
(positive)
The
is
derivatives
d"f+R n (x,
y),
As
y) =-\
Tfc
before, 6 denotes
(1)
Suppose that
T* 1
d n + lf
some
df-Q
at the point (a
+ Ox,
+ Oy).
positive fraction.
for
some variations
in the variables
from
the point (a, b). Then by the continuity of the partial derivatives
of the function, rf/^0 also for some variations from the point
(a
+ 0x,
Further,
if
o.,
+y r- happens
df=x^~
ox
c/y
496
of x and
y,
must be negative
it
+ x,
f(a
for values of x
+ */)-/(, b)=df
at (a
+ 0x,
+ 0y),
(2)
= ~d f
z
f(a, b)
+ 0x,
at (a
we can
(b)
has a
(c)
maximum
If d z
f>
distinguish three
(a, 6),
then z=f(x y)
(a, 6),
then
=f(x, y)
minimum
If d 2f
is
positive for
then z=f(x, y)
point
+ Oy)
2
(a) If d
has a
"
saddle point
"
of the
function.
z
often
If
df=d f=0
met with
in practice,
function of
* It is
possible that
is
2
d*f< (or d />0) for all variations except some which
not included in the three cases here distinguished and
necessary to allow for such possibilities.
is
497
ly
l9
rfi/
and d zy 7^0
for
some variations
d zy<0 for
variations
all
variations, a
"
"
and a
saddle
minimum
value
if
value
if
d 2 y>0 for
all
The
all
A maximum
negative (positive) definite for all variations dxl9 dx 2 ... dxn The
conditions for either case are given in 18.9 above.
In the case of two independent variables, a point where fx ~fv =
is
gives a
maximum
value of z~f(x, y)
if
is
negative definite,
i.e. if
fxx <0
The point
2
gives a
and
minimum
fx
'.X
,
JXV
Jxv
Jvv
value of z
if
the
first
inequality
M.A.
is
498
reversed.
of extreme values,
is
is
Jxxjyy^> (jxv)
(14.2 above).
If there are three independent variables, then a point where
fx =fy =zfz =
gives a
2
maximum
d u -fxx dx
is
The point
gives a
are reversed.
i.e. if
/,
/,xv
Jxv
Jvv
>0
minimum
and
value of u
19.2 Relative
f(x, y, z) if
+fxv dx dy +fxz dx dz
2
+fxv dx dy +/ dy
+fvz dy dz
dxdz
+/xz
+fyzdydz +fZ9 dz*
negative definite,
ities
value of u
differential
Jxx
Jxv
Jxz
Jxv
Jvv
Jvz
Jxz
Jvz
Jz'.
if
the
first
values.
form of the
criterion for
extreme
values
that
is
it
an extreme value
xn ) = 0,
<i (#15 # 2
relative to a
number of given
side relations,
. . .
With a
y=f(xl9
x2
condition
single
,
is
...
(f>
side
. . .
. . .
relation,
xn ) relative to
we
(f>(xl9
x2
...
xn )
0.
The necessary
that
dy
for all increments
fxi
dx
-f/a;8
which
dx 2 +/a;a dx% +
...
+fx n dxn =
satisfy
Taking
we
499
x z xa>
xn
...
Hence,
/&=/&=!=...=/..
These are the necessary conditions
we
sufficient conditions,
/"72/j/ ~~~"
if
f
J 3Ci
/"72/yt
1.
'~J
where
/7 /y 2 _j_
"T"
Xi VvvUi
c?^
<f>
Xz
I {EoJCft
2
/7o*
**
^
2
/
dx 2 +
. . .
* * *
"T~
'"
tyf
+ ^^ rfo;
5Pi JC*
obtain
^ a rf^ -f <^ a
.
da; 2
. . .
fj'y/ tviA/o
/it*
^'*
1
i^
. . .
=
n
2
Eliminating d x^ by means of the last relation,
where
To
write
we have
+ (^^ rfo; n = 0.
maximum (minimum)
form for
definite quadratic
increments dxly dx 2
all
The
...
dx n subject to
18.9 above, indicate the appropriate signs for the principal minors
"
"
of the determinant formed from the coefficients in d 2y,
bordered
<f>
ditions
<f>(x,
relative to
<f>
y)
and
(x, y)
f
~*
<f>
gives a
maximum
<f>
x dx-\-(f> y dy
<*
J
<Pa;
/ so:
~J
<
Jt
JT
<Px
~
Y>ara:
dx dy
dx dy + /
is
value of z~f(x, y)
if
fxy -
= Q,
y
'
1~
/a;i/
9x
"
JL
<?x\
coii-
i.e. if
500
(/.-#..)
is
i.e.
we remember that
19.3 Examples of
The
f
*
f^
by the necessary
following examples
Ex.
then
If
1.
conditions.
values.
by the
u=x 2 +y 2 + z2
du = 2 (x dx
two
when
-f
is
y dy + z
and
dz)
d*u
= 2 (da;2 + dy* + dz 2 ).
Extreme values of u occur only where du=Q for all variations, i.e. where
x =y =z =0. Since d2u>Q for all variations from any point, these values
must give a minimum value of u. Hence, u has a single minimum value,
u = 0, which occurs where x y z 0. This is also clear since u is positive
except when x, y and z are all zero.
Ex.
If x,
2.
y and
z are
then
and
i.e.
But d ^
2
is
t/
= f,
negative definite at
-2<0,
2=|,
all
=4>0
-2
giving
points since
-200
and
-2
Hence, u has a single
Ex.
3.
To
maximum
value ^f
-2
-2
-6<0.
-f
by +cz
from
Let u be the square of the distance from the origin to the point with
Then
z) on the plane.
co-ordinates (x 9 y,
u=x2 + y2 +z2
where
ax + by
4-
cz
= d.
relative
501
maximum
is
a dx + b dy + c dz = 0.
subject to
So
?=|=?a
b c
Since ax
+ by + cz
d,
cd
is
U=s
Taking the equation of the plane as giving
d2x = 0, and
as a function of y
a;
and
z,
then
the
minimum.
minimum
The
value of u,
is
i.e. it is
subject to
2(x dx
+y dy +z dz) =0.
xz
yz
xy
- == _=_^.
Hence,
2
2
2
Using x + y + z
Now,
=a2 we
,
-f
=-^
16 (z dx dy
giving
=^
+ x dy dz -f y dx
dz),
xdx+ydy + zdz==Q
where
and
where the given
eliminating d*x,
x =y =z
find
d2 V = Syz d2x
x as a function of y and
we have
subject to
dx
4-
dy + dz = 0.
z.
On
502
For a
relative
maximum
- dx*
+ dxdy + dx dz
+ dxdy-dyz +dydz
+dx dz+dy dz-dz2
must be negative
definite subject to
-1
8a3
Hence,
'*
is
= 4>0
and
conditions for
0111
1-111
11-11
111-1
the relative
maximum
value of V.
19.4
(14.8 above) are stable if the constant product curves, obtained from
the given production function, are convex to the origin at all relevant
The
points.
can
now be examined
good
is
orders
and
-=
(rand
problem is, given the market prices pl9 p 2 p& ... p n of the
to
find the grouping which produces a given output x at minifactors,
have to minimise
cost.
1 pl +a 2 p z + a.3 p 3 + ... +a n p n
Our
first
mum
relative
IIa
We
to/(%, a 2 a 3
subject to
\-
...
a n )=x.
is
?l^^_^3_ "' _^
fn'
A / /.
There are (n-1) equations which, with the given side relation,
determine the equilibrium employments of the factors in terms of
the given output and the given prices of the factors.
demand for each factor and we can write
We thus
the
(r
= l,
2, 3,
...
n).
have
503
...
an
we have
2
2
*
a
d
da
A
+/u
+/22 da 2 + ..
But
+p 2 da 2 + ...+p n dan =
)
and
. . .
-f
An dax dan
-h/2n
. . .
da 2 da
+
is
From
18.9, (2),
a sufficient condition
>
is
/X
A
/a
I/A
I/X
/A
/a
/s
/ O
/i
/ii
Aa
/u
/i2
/is
/2
/12
/22
/2
/12
/22
/23
/3
/13
J23
/33
'
Suppose that/!, /2 /3 ... /n are all positive and that the inequalities
above are satisfied for all combinations of factors within a relevant
,
range. Then, for any set of outputs and prices of the factors (within
a certain range), equilibrium is possible and the position determined
is
stable.
We
have the
stability conditions
for the
demand
for
is
easily
stability conditions
We
= l,
2,
3,...n).
504
Hence,
/c
i.e.
KT
factor
is
Ar
let
(77)
which
is
spent on the
F=
Let
and
to the
Frs
/,
/,
/,
/I
/ll
/1 8
/13
/In
/2
/12
/22
/23
/2n
/n
/In
/2w
/3w
Jnn
Write
(r
(,and
and
s9
and
= 1,
2, 3, ... n).
= l,2,3,...n).
the value of
<r rs
is
called the
s (as
partial elasticity of substitution of the pair of factors -4 r and
and
varies
all
value
other
Its
with,
factors).
depends on,
against
substitution between
Examples XIX,
A number
9).
s.
If each element of the first row of F is multiplied
of
the corresponding element of another row, then
the
co-factor
by
the sum of the products is zero (18.4 above). So
values of r and
/l^rl+/2^r2+/3^r3+-..+/n^rn =
From the definitions above, we have
So
We
/qor rl
fc 2 or
r2 -f K^<j rZ
. . .
+ Kn arn =
(f
= 1,
2, 3,
...
n).
(r
=1
2, 3,
. . .
n).
The last two inequalities of the stability conditions (19.4) imply that
F and Fnn are of opposite sign. The same is true of F and F rr for
But a rr
r.*
is
<0
cr rr
(r
= l,
505
F rr
to
2, 3, ...n).
for
any value of r
(r
= 1,
2, 3,
...
In any
n).
n relations
or negative. But the limitations above show that the positive values
must be more numerous or important than the negative values. In
- I) partial elasticities of substitution between any
particular, the (n
A and A then
Kior12 -H 3 23 >
13 > 0,
three factors (A l9
/c 2 o-12
H-
all
be negative.
3 ),
/c 3 c7
/c
o-
and
/c or
13
/c 2
(T23>^-
o-
13
19.6 Variation of
It
is
demand
now assumed
partial elasticities
is
an)
production of the good X, the production function x =/(! # 2 # 3
being linear and homogeneous with the properties set out in 18.5
,
p n ) of the
x by Euler's Theorem.
Further,
== P^ =z P^
/2
/I
and
The average
JP*=\
Jn
/3
/(!, a 2 a 3
cost of the output x
. . .
...
above.
Pi
...
a n )=x.
is
U
since a lt/i
X
-f
a a /2 +
/3 +
. . .
+ an fn
506
the output varies while the prices of the factors remain fixed, the
marginal cost at the output x is
if
dU
tion.
dan
da*
da*
,
dan
= 1 from the production
lunc+/n -~ax
ax
Average cost and marginal cost are equal and, therefore,
da*
since /!
--
da*
-7-=
ax
H-/a
constant for
-~ -f-/3 da*
-f
da*
fl
. . .
doc
all
outputs.
is sold
Extending the problem of 14.8 above, it is assumed that
on a competitive market at a price p equal to the constant average
cost.
equal to p,
is
i.e.
the law of
Then the
h h
Jl
Pr=Pfr
which
~ ~
= l,
2, 3,
...
"
marginal prodiictivity
3,
...an )
*8
".
~
Jn
n),
f(a l9 a 2
...
~~.
= <fi(p),
and
cWIU
/2
Jl
Jn
/3
in similar terms.
The demands of the competitive market for the factors are determined, by the equilibrium conditions, as functions of the prices of
the factors.
(p^)
vary while
all
the other
The
fixed.
equations (which hold for any prices of the factors) with respect
to ft.
From /(<%, a 2 a 3
,
dai
. . .
an )
Ba 2
<
(p),
dan _
xdp
...pfn =p n
507
Hence
da,
idp
da
da,
r=.
jF
J^
^0,
where a rs
is
is
and
respectively
19.5,
F rs = fFK a rs =^FKrars
s
Jr
Js
F^-Zgp,
x
Ar
and
and
dpi
da-L
we
find
508
With the
aid of 18.3,
(5),
2>
since
^=
Hence,
i.e.
we
find
We
in the price
any
factor
demand
.^_J
Ep r
Z_f =
a 8 dp r
(QT
"
-.-n)
(r
and
= l,
2, 3,
...
n).
A r rises, then the demand for this or any other factor is affected
in
two ways.
>
decrease in the
demand
This effect
is
shown by the
and
demand with
the factor
Ar
now
is
relatively
509
factors
The
r in production.
pays to substitute other factors for
demand for A r thus decreases on account of substitution, as shown
it
It/a
in
(/c r o> r )
19.5 above, a rr
(By
is
negative
factors
is
is
-(K r a rs ) in =r
(1)
demand
for
increases
on account of
(2) If
for
v rs
the factor
by other
s,
like
factors in production.
the factor
r,
From
are com-
three factors, for example, either all factors are competitive with
each other or one pair of the factors is complementary while the
The demand
We have considered
difference
"
map and a
"
integrability
utility function.
in-
Complications relating to
first
approach.
510
n goods
If there are
X X X
2,
l9
Xn
39 ...
let
utility
X2 X3)
,
...Xn
+=
and
+'=
that u has a
prices, p l9 p 2 # 3
maximum value subject
fact that he
must balance
his
two orders
first
budget
for the
maximum
du = ^ dx +
subject to
dx 2 -f ^ 3 dx 3 +
. . .
pl dxl 4- p 2 dx 2 +Ps dx 3 -f
. . .
(/> 2
jk
Pi
ie
==
4-
<j>
dxn = 0,
+p n dxn = 0,
ib =
= "" = ^2.
Pz Ps
Pn
-
These (n-I) equations, with the given side relation, determine the
equilibrium purchases of the consumer in terms of his given income
prices,
P>Pi>P*>P*>
Pn-
i.e.
= u dxj 2 +
<f>
+
4-
is
<f>i*
<
12
dxl dx 2 4-
<
13
<f>
23
dx: dx3 +
. . .
<f>
2n
dx 2 dxn
.........................................................
i.e.
to
(using the necessary conditions).
511
18.9, (2),
&
fa
02
01
0n
012
02
fa*
03
013
<f> 2
fa
fal
faz
fa
012
022
0!23
The equilibrium position and the demand functions are stable for
any income and market prices if ly 2) 3 ... n are positive and if
<
<f>
<f>
<f>
it
stability conditions
cular utility function 0, and it is not clear that they are independent
of the non-measurable character of utility.
can, however, translate the conditions so that they involve only the marginal rates of
We
The
ratios
n
t for
2 Jf 3
express the marginal rates of substitution of
The
conditions
for
show
that
necessary
respectively.
equilibrium
,
. . .
goods concerned.
Now
0i
similarly for the partial derivatives of the other marginal rates
of substitution. The determinant inequalities of the stability conditions, using these results, can be reduced to
and
03
dx2
a^
\0!
__
<f>
dx3
512
The
and
r-
o>.
"*
\-xn </> n
(r
where
<P rs is
the co-factor of
<f>
rs
2, 3, ... n),
in the determinant
0n
03
<p 2
and
01n
01
011
012
013
02
012
022
023
02n
0n
01n
02n
03n
0*n
At the equilibrium
Pi P2 P3
xlPl + x zPz + X3Ps +
and
Pn
+ X nPn
I*"
It is
demand
Ex s
jj,
dx s
Ep,
xs
dfi
found
(see
Ex
for
,
/*
any good
Ex
p r dx a
ffipr
%s dpr
Examples XIX,
17
and
18) that
(Ex^'
in the
ux
~-
expression for
r is
now
513
relatively
more
ri
for =--
(The value of
cr rr
The
effect of substitution
(X s )
is
this
is
--
The consumption of
&Pr
in
sumer
represented by a point
is
(x, y, z)
* We have
given here definitions of competitive and complementary goods
which are more strict than those previously suggested (12.6 above). On the
old definition,
positive.
From
ffr
r
T?<y
-^
&pr
Ifr \
kiiL*
= KT ( ara - --
negative
if
Ex
Ex
-~~
or -=~
Z&/Z
is
positive
and
if
-*^Pr
,
wo
new
l^v
-~
are both
-^Ps
definition
jgx
(<rrs
> 0)
jgx
?f
,
i.e.
if
P*
the effect on
jfejLt
demand
2K
M.A.
614
partial derivatives.
The
differential
"
"
budget balance
(xpx + yPv + zpzp*) an<* any variations
in the purchases from an established set (x, y, z) must satisfy
dition of
p x dx +p y dy +p z dz
If the purchases of
The
0.
indifference equation
X is
is
dz.
compensating decrease, the consumer will tend to decrease his purY and Z. In fact, equilibrium of consumer's choice is
chases of
Rl==^
Px
and
E 2 =^
Px
position,
dy +
~ dz
P
in the
purchase of X. The
new
515
'
+ dRl and
)
where
-^~
dx
dR-i
-
dR-t
+ --~dz
-dy
dz
dy
and
dRtt2
-,-n
2
*
dR
^
dx
dR*
dy
Suppose, now, that an exactly similar change from the new purchases
is
contemplated. The necessary decrease in the purchase of
is
Px
now
is
The
Px
change
will not
is less
dy H- (R 2 + rf^ 2
+ dz =B
dz<dy
Px
Px
dy + R 2 dz,
dRl dy + dR 2 dz < 0,
i.e.
p x dx+p y dy+p z dz
or
dx + Rl dy-{-R 2 dz
dx 2 + -
~
-l
dx dy+-
-~ dx dz
,
2 dx
~z
2 dz
must be a negative
dy
%\dy
2\dy
dz J
dz
T
dz
dx + R! dy + R 2 dz = 0.
dRl and dR 2
Substituting for
9jR 2
i .e .
516
Hence, from
18.9, (2),
51*
2 dx
dy
R,
IdRi
2 dx
2~dx
dR1
2\dy
1
7l
7?
/
I
2 dx
By
dz)
dR,
\\
.
dz J
dz
conditions.
Since an indifference
the conditions
D=19B,
2 dx
dx
dx
dy
Further, write
dx
dx
dz
dy
dz
"
a
W_!
\ dz
it
can be shown
517
stability conditions
B,
dx
dz
dy
SB*
dx
dy
dz
The conditions of
than a certain positive amount A 2
the integrability case must still hold but they are only necessary,
and not sufficient, for stability. Notice that the integrability conalso greater
is
true of
p x p y and p z by
,
the conditions
Px
This
Px
In the special integrability case, the forms
all cases.
when we
modification
is
found to be
less clear-cut in
EXAMPLES XIX
General
1.
2.
Show
Show
that
= 0.
y=
3.
518
4. Show that u
Slxyz, subject to x + y + z = 3a, has a maximum value
z
a.
Deduce that the geometric mean between three
(u = a) when
positive quantities is always less than the arithmetic moan except in the case
where the quantities are equal. Generalise the result to apply to any number
of quantities.
x~y
5. Find the shortest distance from the origin of co-ordinates to any point
on the surface xyz = a in the positive quadrant.
6. If
is
y and
z is
given
is
the perimeter.
X X
12
13
where
polist
Extend the
8. Find the conditions under which the equilibrium of tho general problem
of 14.5 above is stable, expressing them in terms of the partial derivatives of
the production function x~f(a, 6, t).
*dfe]
a
\a >
3
where the
differentials
When
10. Three factors are obtainable at given prices, p lf p 2 and p 3
amounts a l9 a 2 and a3 of the factors are employed, the output of a good X is
x = A$ a^a^. The good is sold at the competitive price p on a market with
demand law x Bp~*. Find the amounts of the factors demanded in terms
of p l9 p 2 and p 3
By differentiation, show that
.
Ea
519
11. For the production function of the previous example, show that the
demands for the factors are stable and verify that the partial elasticities of
substitution are all equal to unity. Hence use the results of the previous
12.
good
function, x=f(a lt
is
19.6.
2,
?1=|=?S=...=?5
Ji
Ja
Jn
J*
= A and
f(a v a v a v ...a n ) = x
give the demands for the factors in terms of the given output (x) and the given
prices (p lt p z , p a ...p n ) of the factors. By differentiating these equations,
show that the variations of the demands are given by
,
when output
and by
>
when
the price of one factor varies (output and prices of other factors fixed).
is the co -factor of fs in the determinant
and KT and ars have the
s
meanings of 19.5. Interpret the second results in terms of the competitive
and complementary relations between the factors.
Here,
x=f(a l9
cr
2,
the amounts
where
77
is
p 99 ---Pn^
3,
...
a n ),
is
and
^
r/
Jn
the elasticity of the demand for the good.
/3
is
14. In the problem of the previous example, the price of the factor
l
varied while the prices of other factors are fixed. Differentiate the equilibrium
equations and show that
Ea r
EPl
p. da r
a r ^rdPl
-
N
i
rj
=rl
lr
r
19.5.
Deduce
ft
2>
that, in the
normal case
consumer has a given income (^) and can buy three goods at given
15.
prices (p lt p z and 3 ). One form of his utility function is u x^xfixf*, where
a x , a 2 and a 3 are positive constants. Find the demand of the consumer for
each good in terms of /x, p l9 p 2 and p 3 , and show that
>
520
Show
-- --
Exr -- -P dx
- r _x
-=
EH xr op,
where the
<f> l
-\-x 2 </> 2
+ ...+x n
</>
xr
&r
-=<P
i, ., o, ...
\r
is
n)
adopted.
varies
In the problem of the previous example, the price of tho good
l
while income and the other prices remain given. By differentiating tho
equilibrium equations with respect to p 19 show that
18.
19.7.
for
(a x
+ a^xj dXi +
whore x l9 x z a? 3
and where tho
,
...
(a z
consumer
+ a aa.r a dx 2 +
)
. . .
n goods
(a n f
is
defined
by the
a nn x n ) dx n =
20.
produces
n goods and its outputs of tho various goods arc related by a transformation
function F(x l9 x z x a ... x n
Q.
Tho goods aru sold at given market prices,
p lt p 2t p 3 ... p n and the firm fixes tho outputs to maximise its revenue
E = x p +# 2 /> 2 + ... +x n p n Find equations giving tho amount of each good
l
supplied as a function of
all
is
the
supply stable ? How can partial elasticities of substitution between the goods
in production be defined and used to describe the variations of supply of
different goods as the market price of one good changes ?
21. Extend the analysis of the demand of an individual for loans (14.9
above) to the case where x lt x 2 # 3 ... x n are incomes obtained in n
successive years, related by a transformation function F(x lf x 2 x 3 ... x n )^0.
Assume that the individual has a utility function for incomes which can bo
written u$(x^ x 2 x3 , ... x n ) and that the rate of interest is I00r l por cent.
from the first to the second year, 100r 2 per cent, from the second to tho third
,
year,
and
so on.
CHAPTER XX
SOME PROBLEMS IN THE CALCULUS OP VARIATIONS
The general theory of
20.1
WE
functionals.
finite
ing on one or more other quantities. There remains for brief consideration an extension of the analysis, opening up many new fields
of application, which takes a quantity as dependent not upon a
finite set of other quantities but upon one or more variable functions.
its
function
<f>
(t)
of the function
upon <f>(t) is called & functional and written u F{<f>}> The functional
symbol F is to be regarded in a manner analogous to the ordinary
symbol for a function. It is essential, however, that the functional
u = F{</)} should not be confused with the function of a function
The latter assumes that <f>(t) is a given function of t
u=F{(/)(t)}.
and hence that u is also a definite function of t. The former takes
as a variable function, the functional F associating one value of u
with each whole function
The variable t does not itself appear
in the determination of u in the functional relation.*
In diagrammatic terms, the variable function x = <f>(t) is shown
by a variable curve C in the plane Oxt. As the form of the function
changes (</>l9 2 <^ 3 ...), the curve C shifts and takes up different
If ^ is a functional of
then
)
positions and shapes (Clt <7 2 ^3>
its value depends on the particular position taken by the curve (7,
</>
<f>.
<f>
More
u may be a
<f>,
x=<f>(t),
generally,
y^t(t),
z^xM
We
522
and
series of definite
shows
there corresponds a
For example, Fig. 103
(7 2 , (7 3 , ...)
five positions of a
end-points
An example
quite simple
FIG. 103.
the good.
when
market
different
supply function, x=f (p)> can
prices are given.
thus be defined for each firm. But if the firm has monopoly control
and fixes output and price subject only to certain demand conditions,
then the output is such that marginal cost equals marginal revenue.
If the marginal revenue curve is given (given demand conditions
and given prices of
monopoly output xm
(changing
demand
all
.
523
The
20.2
calculus of variations.
f(t) is
where
and ^ are
(f>(t)
Write
changes.
<f>
(f>.
Ex.
1.
The problem
minimum
area.
is
and
way
so that Ot
(t Q ,
and
lies
(t ly
along
L and
xj which are
positive
and
J5,
and t^> tQ
then
it
lfx =
</>
(t) is
any
Integral Calculus, Vol. II (English Ed. 1936), Chapter VII; Osgood, Advanced
Calculus (1925), Chapter XVII ; de la Vall6e Poussin, Cours d'analyse infinitisimale, Vol. II (1925), Chapter X.
524
is
propor-
tional to
Here u
is
<f>
by a particle to
under gravity along the curve
from
to A is least. Axes Oxt are
chosen, as shown in Fig. 104, with
and with
origin at the given point
Ox drawn vertically downwards. Let
slide
have
co-ordinates
(tlt
xj which
A
FIG. 104.
from
to
it
by a
is
particle to slide
under gravity
proportional to
minimum
20.3
value of u.
Two
methods of solving problems in the calculus of variationsThe first point concerns what can be called boundary conditions.
The problem to be solved is usually framed so that only certain
practical
= <f)(t)
<f>
to B.
This
is
so in the
525
is
illustrated
by
and
<f>(to)=x g
where A(t X Q ) and B(t^, x) are the two fixed end-points. Other
boundary conditions may be imposed in less usual cases. It may be
given, for example, that the variable curve x = <f>(t) should join two
points P and Q which lie one on each of two given curves in the
plane Oxt. Here, we have the boundary conditions <f>(t Q )=XQ where
(to, #o) are ^he co-ordinates of P and satisfy some given relation
x )=
and similarly for the co-ordinates (^, xj of Q.
*ti(t
Even when the boundary conditions are taken into account, the
field of possible variation of the function x
that
<f>(t) is so large
analysis of the problem is practically impossible and it becomes
essential to limit the field of variation by some further device. An
,
obvious step
limited
particular class.
We may
We
/?,
y,
. . .
where
<f>
is
replaced
It
We
is
by the
is
form.
is
526
parameters,
we can make
made to
general.
is
can be
extreme values of u =
function x
<f>(t).
f(t) dt
where
f(t)
/o
way
indicated, the
meters
a,
/?,
y,
...
and we require
its
maximum
or
minimum
value
for all variations in the parameters allowed by the boundary conditions. The problem of the calculus of variations is thus reduced
variables a,
The
solution
are,
we obtain
approximation
various derivatives of
<f>.
Of the many
simplest will be analysed here, the case where f(t) depends on the
variable t, on the function <f>(t) and on the first derivative <f>'(t)
:
*>
(t,
=/{, W),
(*)}.
* The
step from functions to functionals is reversed. A functional can be
regarded as a function of an infinity of variables. In solving problems of
functionals, we approximate by taking a function of a large number of variables
(the parameters
0, y, ...). This is in line with the methods always adopted
for dealing with the infinite and the step made here is, after all, not unusual.
,
a function of
is
<f>
527
(Z
dx\
f
for
(/>(t Q
)x
and
<t>(ti)=xl
where
(t Q
X Q ) and
x,
dt are required
(tl9
in 20.2
first
and
in the problem of
John
t,
in
possible variations
all
In the
Bernoulli!
In solving the problem, we impose the limitations on the variation of <f> (t) already described, taking this function in the form
x = t(t; a,&y,
where
where
<f>
...)
is
are parameters.
Allotting arbitrary differential
to
the
...
S/?, 8y,
parameters, we derive first the
8x
and
variations
Sx' in the function x and its
corresponding
a,
/?,
y,
...
increments Sa,
,
,.
derivative x
dx
-=-:
at
8a
9a
and
&P
dx
dx
dx
80;=:
+ ^5 8^-frr
9y
9j3
fdx\
d (dx\
-
d fdx\ ^
=81-^
)= T
(^ JSa + ^l-ydot\dt/
\dtJ
8j8
r
dp\dt/
d ( 3x \* ^ d ( dx \*(*^ d ( dx \
+
+
= 1; l^)8a ^
dt
dt \docJ
d
dx
^dt \dyl
\df}/
dx
dy\
It should be
differentials
dx
r
1^5J8j8
d (dx
528
"
by the symbol
the other differentials, dx and
are denoted
"
dt,
in order to distinguish
we
obtain
when we
them from
consider x as a
function of
t,
The function
f(t, x, x')
and the
integral
\J*J
dx
v^
/?,
...
ox
ox
and
The expression
u then becomes
tion of x
The
is
zero,
integral
function
x = <j>(t)
i.e.
is
8^ = 0, at these points.
Hence,
as obtained
for this
is
that
8^ =
a,
j3,
y,
...
8/J,
Sy,
...
i.e.
is
only true
known
x ==
dt \dx
(t)
<f>
if
dx
This result,
From
529
Since
-^-
df
-,
ox
and so functions of
and
x and
t,
dx
x'
j-
the equation
fit
is
meters
a,
y,
/?,
...)
minimum
we can
usually
or a
maximum
value of u.
Two
dx \
fit, j7)
ri
Writing x
1'
^-
giving
where a
2L
fa'M'
is
some constant.
This
dt,
explicitly.
^=
0,
x ') =a"
is
530
only the first derivative x', i.e. a simple differential equation of the
first order which can be solved, in m'ost cases, without difficulty.
(2)
x,
-7-
dt,
explicitly.
dx
x' ==-=-
Writing
vari-
=
and using Euler's equation
ox c
X
dx dt
dt
t,
two
dx' dt
\
_
,df\
~
+ ^d^_d_l
dx' dt
dt \dx''J
dt
dx'J
r)f
Hence, / and
x'
-,
ox
can
i.e.
(*,*')+
some constant.
where a
is
the
first
-jjf
t,
Ex.
To
1.
find
values of u
extreme
We have the
\u*J
z')=to'
2tx'
some constant.
J
where 6
is
passes through
two
fixed
Hence,
is
= <f>(t)
and B(tl9 xt ).
/(*,
where a
by the
J<
illustrated
and
-?-,f(t,x')=2tx'.
= constant,
The
=-
i.e.
-^-
d + constant,
a second constant.
logarithmic curve.
i.e.
#=a
is
thus given by a
531
points
and
J5,
we have
XQ =a log
On
+b
+ b.
_r
- log
way we
In this
xl =a log
and
and
t
log
^ - log
fix
U=\
It is
to be noticed.
is
u determined
is
ti-r-
maximum or a minimum
value.
2
Ex.
2.
To
find the
==
M=
value of u
minimum
1
I
<.c,^\
1 4-
dt
where
Jt*
We
is
(2)
of 20.5 with
a
f(x,x')=xjl+x'
and Euler's equation
and
x')
~~"2
jijj
x ,, =
TT
a;
2
-a
~
-a 2
( dt
constant
find
dt
J<s/a
we
dx
a2
dx
Hence,
^^YTx7*
is
_
On
xx'
gp/(*,
It
is
=t
a
2L2
differential
=
a
equation becomes
i.e.
x + v x2
a 2 = ae
M.A.
532
Now,
t-b
t~b\
x = %a{e a + e a )
Adding,
which is the function giving the minimum value of u.
The boundary conditions provide the values of a and 6 in terms of (
x ) and (tlt xj
:
and
The minimised value of u
w=
dt
+e
then given by
I7~7fof
1 +(-=-)
A/
v
\dt/
u=
i.e.
is
where
eft
-=-
dt
= - a\
\e
+e
<-fo\
catenary
1, is
now
the
curve which
is
obtained
the
gives
It
is
Fio. 105.
value
of
u we
have
found
is
3.
To
to the usual
This
is
find the
minimum
value of u
y-
boundary conditions.
t?
and Euler's equation
is
v?
(2)
1
1
+ ( -=-}
of 20.5 with
*"
and
/<*,*>
dt subject
dx _1
i.e.
i.vy.
*/
The
a*
a?x
at
533
ll-a?x
x
dt
4.
4.
t-b
*
20.7
is
given by
to t 1 which we consider. It is
assumed that the market price of X varies continuously over the
period and is represented by some function p (t). The demand of the
"
competitive group of consumers is assumed to involve a
specu"
element and to be described by the demand law given in
lative
16.7 above
* = #{*>(), P'(t)}.
at the price
This
*
is
The
p (t)
is
given by
price
and
-cos 8),
where a' is an arbitrary constant obtained from a. The required relation
between x and t is obtained by eliminating the parameter 0. The expressions
sin 8
and cos
534
The
total profit
in the
output
by an
is
integral,
i.e.
total profit
is
u
For a given course of price over time, the demand x of the market is
determined at each moment and there is a definite value of u corresponding. Different values of u are obtained for different courses of
Hence, the monopolist's total profit depends on the form
price.
of the price function over time, on the course taken by price. It is
that the ruling price at the initial moment t t Q is
given as p and that the subsequent course of price is fixed by the
monopolist so as to maximise his total profit in the whole period
from t = t to t = t^. It is required to determine the course of price,
assumed,
finally,
p (t), actually fixed by the monoThe corresponding output at successive moments is then
derived from the given demand law.*
As a first problem, it is taken that the choice of the monopolist
i.e.
polist.
{xp
when
t^t^.
This
is
f(P,P')=xp-n(x)
p=p
(2)
and
p=p
of 20.5 with
where
x = <f>(p,p')
535
Hence,
dn
dx
dIT\ dx
gives
,
xp-II(x)p
This
dx
dn\ dx
A
p - -j- ^-7 + constant.
,
is
3.-1D
a given function of
p') is
p and
p'
= -f-.
dt
The
are given
The problem
prices.
is
The equation
for p (t)
now
is
+ constant,
p(ap+b+cp')-IJ=cp' [p
--T-)
(t x I
\
__
dlldp
9
=- +
ap 2 + op - /Inconstant.
dx dt
,
i.e.
C ~z
dx
But,
The
r-r-
dt
~r Q'C
and
d*IIdp
z 7dx 2 dt
T"
collecting terms,
(
I
d77
ttp
(t
-{-
equation for
is
p=
r
p (t) then
A
U.
and
differential
dx)
j8
where
2
+ (26a-f-j8)
r = 2a^ + = 2ca-~4-2aajp
dt
2c 2 a -^
(A
c-r:
dx
reduces to
6-2a6a~aj8
-r
rr2a(aa-l)
>
^^d
A2 =
N9
a(aa-l)-
C 2a
536
normal
where
and
is
known
to be
The
solution can be
and
monopolist,
is
given uniquely.
to
the general case, given the final price
Returning
pl9 we have
shown that the price function p (t) and the maximised value of total
profits u can be obtained. The total profits (as maximised) must
be a function of p ly say u~F(p1 ). To complete the problem, the
monopolist has only to fix that final price (of all possible final prices)
which maximises u as a function of pl9 i.e. which gives the largest
total profits of
For
all.
du
-i
this,
we put
,
subject to
dpi
ri
<
dpi*
resulting equation.
capable of generalisation in a
the function in the integral u
above
is
may
relative
problem
arises
when the
integral
u depends
* See
Courant, op.
cit.,
pp. 507-20.
is
537
fixed
shown
variation of
where x'~
and y'= -~
Cut
~,~
Cit
value of u
is
is
that 8u =
dx~dt\dx'l
i.e.
two
there are
and
and
8y.
for
an extreme
Hence,
dy~~dt\dy'
each of which
is
If amounts b
and c
of the factors are used, the total product (or income) of the community is given by the production function product =/(&, c). The
:
variations of labour and capital over time are assumed to be continuous and represented by the functions b(t) and c(t). The rate of
dc
The consumption
is -=-
community
ut
is
at
any time.
then
(1)
See Ramsey,
A modified
538
is
utility of the
community
net
is
utilities
This quantity
is
Write
c'
~ dc and
at
F (b,
where
The conditions
c, c')
first
(a)
(/>)
maximum
for the
dF
The
<f>
d fdF\
r;
10^
and
of
.
and
a ~f(b,
c)
- c'
are
dF
d (dF\
(
condition gives
i e1>e
The functions
equations
(1),
gives
a(t), b(t)
(2)
and
and
(3),
c(t)
539
The
The
partial derivatives
and
measure the marginal products of labour and capital at any time and
can thus be associated with wages and the rate of interest respec-
The
of interest never becomes negative, the marginal utility of consumption falls over time either until it vanishes or until the rate of
interest
becomes
zero.
Further,
a decreasing function of a
if (f>'(a) is
(1), (2)
,,
and
W
,.
=#" <)
rf
we have
(3),
,,,
+ *'(
c)
- a}
{f(b, c)
- a}
#"(a)
So
<f>'(a)/(b, c)
-{<f>'(a)}
fa
^a^'(rt)
a<f>'(a)
{a<^'(o)}
= a-T
{<f>
(a)
{^'(a)}
a</>'(a)
i.o.
(V(a)
+ f tf>'(b)
j dt + constant
f
~ dt + U'(6) -j dt + constant
<fi
(b)}
+ constant,
i.e.
* Since
dt
ct -r-
at
<f>'(a) -3-
a-?- {<f>'(a)}dt
{&' (o,)} dt ~
<ft
(d)
(a) -tfi(b)}.
we have
\</>'(a)-- dt,
(
(i
{<f>
d>'(fi}
da
r
dt
(It*
540
Hence, using
(1),
we
find
^C _^
where
Since
is
a constant.
is
to be a
ITV W /
maximum
(as
Y\"l)
/A\
excess of utility over disutility, cf>(a) - ^(6), must increase over time.
Further, it can be taken that capital increases at a decreasing rate
"
"
until it becomes stationary at the
optimum at t =^. So, from (4),
the excess of utility over disutility increases and tends to its maxiat t = t^. Then, from (4), the rate of saving multiplied
mum value A
it
becomes
zero.
EXAMPLES XX
Problems in the calculus of variations
1.
(h
x*
to
tl
u=
Generalise by considering
similar lines.
j'
fdx\ 2
(
~r
dt
/dx\ 2
^ dt/j
dt,
where n
is
a fixed number, on
when the
function
\dt/
Show
values of
u=
u=\ \ x
4. If
dt,
jtoX 2 \dts
\l
maximum
or
minimum
and t = tlf
\~:r) \
dt,
t~t and
Show
5. Light, travelling in
<f>
<f>
which minimises u =
Cxi i
fdy\*
-
dx,
where v
is
541
The
fixed values at
function x =
<f>
(t)
tQ
and t = t 19
by
f(x)\l
V
+ (/dx\
-y }
dt,
where x has
is
given by the
\dt/
show that an extreme value of u
(*i
2o
defined
dx
when the
9.
In the problem of the previous example, show that the price falls to a
after about 20 weeks. What is this minimum? Draw a graph to
minimum
10,
over time.
'
eM*i-*o)-e- A <i-o)
20.7,
show that
~ (Pi-P)e**
- e-*<i-fc>
tl
tl
pf__(Po-p)e*
e*<*i-W
Under the conditions of the previous example, show that the price p
the period (f tj from p Q to a minimum and then rises to p^ Verify
that the minimum price occurs when
11.
falls in
12. In the problem in the theory of saving analysed in 20.8, the production
function /(&, c) is linear and homogeneous. Show that
and
Show,
also, that
ldc_df
c
dt~^c
a<l>'(a)-
"
c<f>'(a)
optimum time
(i
INDEX
[Numbers
refer to pages;
numbers
MATHEMATICAL METHODS
Abscissa, 21
Acceleration, 149, 151, 185, 303, 310
Analytical functions, 38
geometry, 49, 61-82, 272
Approximate integration, 396-9
Approximate values from derivatives,
142-3, 146-7
from infinite series, 447, 450, 454-6
from limits, 95-7
Arithmetic series or progression, 449
15,
polar, 27
rectangular, 20-2
Cubic equations, 31, 51-4
Curve classes and systems, 48-9, 61,
76-80, 414, 423-30
Curves and functions, 36-8, 48-50
Cycloid, 533
vari-
Binomial
464
expansion, 454-5
Boundary conditions (calculus of
variations), 524-5
Brachistochrono problem, 524, 533
Calculus of variations, 523-33, 536-7
Catenary, 532
Circle, 34, 37, 75-6, 79
461-9
Derivatives and partial derivatives
and approximate
values,
142-3,
146-7
inflexional values,
364-9, 459-61,
351-9,
497-500
as rates of change, 142, 179, 246,
251, 303-5, 310, 326
as ratios of differentials, 329-30,
465
as tangent gradients, 143-8, 179,
246, 252, 297-8, 303-5, 308, 338
definition of, 137-42, 296-7, 309
infinite values, 147-8
in natural and social sciences, 14957
of functions of functions, 168-71,
298-9, 333-4, 466, 469, 471
of implicit and multi-valued functions, 206, 335-40, 466-8
of power, exponential and logarithmic functions, 162-3, 177,
242-6
rules and evaluation, 163-75, 244-8,
298-300
INDEX
544
Exponential
Extreme
series,
465
495
466-9
Determinants, 472-80
and
and
481-2
473
expansion rule, 480
minors and co -factors
of,
Differentials
and
of,
478-80
differentiation, 328-
40, 461-9
393,
412-34
305, 421
Ellipsoid, 380, 428
450, 454-6
defined by integrals, 397
Geometric
447-8, 449
Geometry and
analysis, 1,
36-8, 48-9, 270-2, 275-6
16-23,
Graphs,
Homogeneous
221-8
481-2
464-5
Indefinite integrals, 384, 391
Infinite derivatives, 147-8
66-76, 272
Errors in variables and functions,
142-3, 328
Euler's equation, 529-33, 537
Theorem, 317-9, 348, 349, 434, 481
Expansions of functions, 449-69
Explicit functions, 29, 268, 276
Exponential functions,
Integrals
211-3,
218-9, 228, 234-7, 242-6
217,
and
INDEX
and integration as inverse
Integrals
393, 412-34
456
Logarithms, 213-7, 237
Logic and mathematics, 1-2
Logistic curve, 26 5, 419
series,
Magnitudes,
205,
545
Power
function,
series,
functions, 234-7
218-9,
450
Quadrants of a plane, 18
Quadratic equations,
forms, 485-92
5-6, 7, 30, 51
326
Rational numbers,
4, 11-2,
Real numbers, 6
Rectangular hyperbola,
86
103
Relative maximum and minimum
values, 364-9, 498-500, 501-2
9,
211,
161-3,
228
lines,
288, 351-2,
357-9
Roots of an equation, 51
Ruled
Number
e,
Numbers,
230-1, 465-6
3-7, 85-7
Ordinate, 21
Origin of co-ordinates, 20-1
surfaces, 315
INDEX
546
139
ECONOMIC APPLICATIONS
cost, 120-1, 155-6, 261-3,
401, 505-6
product, 133, 178, 267, 312-3, 321-2
revenue, 117, 153-4, 257-60, 400-1
Average
Bilateral
monopoly, 381
and complementary
Competitive
goods and factors, 282, 311, 3612, 509, 513, 619
Compound interest problems, 31,
228-34, 235-7, 248-50, 362-4,
376-8, 401-3, 404-5, 418, 419
Conjectural variations, 203, 346-7
Constant outlay curves, 256-7
505
Consumers' choice, theory
289-91,
374-8,
of,
438-42,
124-9,
509-17,
520
surfaces (for consumers' goods), 289, 108-10, 121, 281-3, 374-5, 434,
509-17
continuity
of,
dynamic forms
110-2
of,
435-8, 533-6
519
elasticities of, 373-4, 508-9,
519
520
stability of, 377
262,
283,
370-2,
Duopoly problems,
INDEX
Elasticities
of
demand
(consumers'
and decreasing
261, 263
Indifference curves
returns,
and surfaces
(for
consumers' goods),
124-7, 156,
289-91, 344, 375, 439, 441-2, 511
(for income over time), 127-9, 157,
291, 344, 377-8
Indifference direction, 439
piano, 440, 513
Investment, amount of, 228-32, 233,
235-6, 402-3
opportunity
line,
124
Linear homogeneous production function, 320-2, 343, 371-4, 434, 5059, 541
Loss leaders, 362
547
National
240
Savings Certificates,
230,
442
438-42
Present or discounted values, 232-4,
scales, 124, 290,
534
variable over time, 434-8, 533-6
Production, capital and interest, 3624, 403
Production functions and surfaces,
320-2
particular forms of, 288-9, 313,
322, 343, 363, 403
Production indifference curve, 123
Rate of
506
rate of return over cost, 156, 159,
234, 345, 376-8
rate of substitution, 156, 286, 3413, 344-5, 372-4, 439-41, 511-2,
513-7
rate of time preference, 157, 344,
377-8
revenue, 15, 153-4, 257-60, 400-1,
522
supply price, 155
utility, 265, 314, 344,
utility of
money, 512
537
Revenue,
ginal,
400-1, 522
of consumers,
INDEX
548
dynamic forms
121,
520
of, 43.5-8
Wages
539
AUTHORS
Akarmaii, G., 404
Allen, R. G. D.,
222, 375
and Bowley, A.
L.,
Cantor, G., 6, 86
Hogberi, L., 35
Hotelling, H., 60
Johnson,
W.
E., 261
P.,
343
Champernowne, D.
G., 251
Courant, R., 301, 478, 523, 536
Cournot, A, A., 200, 204
Dedekind, R., 6, 86
do la Vallee Poiissin, ('. J., 366, 422,
426, 523
Douglas, P. H., 288, 294
411
Moore, H. L., 255, 261
523
K. G., 332
241,
234,
156,
W.
Osgood,
Tinbergen,
,J.,
437
A., 123
Hicks, J. R., 204, 343, 362
Hicks, J. R., and Allen, R. G. D.,
344, 375, 517
Hayek, F.
404