User:JustinHsu

Homework 12

Calculus in Economics

Hello again! As we all know in to days world calculus is used in almost every field of work. Most people believe that calculus is only limited to areas in science and mathematics but calculus can be found in almost any professional field of work. In this short essay I will be discussing the use of calculus in the field of economics and how to apply it.The basic goals of micro economics include economists analyzing, creating models, and predicting elasticities of goods and services. Another key area of micro economics is firms trying to maximise profits for its company which means producing the most amount of goods at the lowest price. Calculus is practically required if anyone wants to pursue a career in economics.

One important accept of economics is that it uses functions as a tool for ways to examining relationships between dependent or independent variables. One Example in the applications of these functions in economics functions is determining the relationship between income and education and using it to predict standard to living. If the average standard of living rises as income and education increases it can be said that there is a positive relationship between these variables and standard of living in a function of income and education . Economists with the use of derivatives are able to measure the average change in the standard of living relative to increases in income and education.

When economists are examining profit maximization for firms economists would have to calculate the how much the firm should produce in order to maximize profits. When firms are maximizing profits the firms will have to equate marginal revenue to marginal cost . The word “marginal” means the use of derivatives in the calculations. If the firms wants to maximize profits it would have to take its deviate to make marginal profit equal to marginal revenue minus marginal cost. Profits will be maximized when marginal revenue equals marginal costs.

Another way Calculus is used in microeconomics is calculating the elasticity of goods or services. In economics elasticity is defined as the measurement of the responsiveness of supply or demand to changes in price. When calculating elasticity ecnoomists have to use some calculus because economists are dealing with marginal changes in a good.Using this formula we can calculate any elasticity: (Percentage change in X) / (Percentage change in Y) = (dX / dY) * (X/Y). dZ/dY is a derivative of Z with respect to Y. With this basic formula we can calculate different types of elasticity such as price elasticity of demand, income elasticity of demand, cross price elasticity of demand, and price elasticity of supply. These examples are just some of the many applications of calculus in economics.

By writing this essay I hope I have made more clear a way in which calculus is used and the various applications that require some form of calculus to compare and analyze large amounts of data in order to make accurate and clear predictions in various scenarios.

References

http://economics.about.com/cs/micfrohelp/a/calculus_elast.htm

http://en.wikipedia.org/wiki/Calculus#Applications

http://www.answerbag.com/q_view/1964478

http://www.ehow.com/about_6662178_calculus-used-economics_.html

Homework 1

Hello,

My name is Justin Hsu. I am a first year student here at UBC and hoping to major in economics.

The Pythagorean Theorem:

To start off the Pythagorean Theorem is in a right triangle or able to take the 2 sides of the triangle and find the hypotenuse. The equation is a^2 + b^2 = c^2 C represents the hypotenuse and A and B represent the other sides of the right triangle. This equation will be very useful when your trying to solve basic algebraic or geometric problems. For example, you are give the side 5 and 12 on a right triangle and are told to find the hypotenuse. So how we solve is we plug 5 into A and 12 into B this should look like 5^2 + 12^2 = C^2. Then the next step is too simplify so it should look more like 25 + 144 = C^2. The next step is too add 25 and 144 together so it should look like 169 = C^2. The last step is to square root both sides and you should get C = 13. Some real life application is finding the length of a ladder if your trying to climb to the top of a building. First you must know the height of the building and how far away the ladder is from the building so you can find the hypotenuse which is the ladder. There are many different real life applications for the Pythagorean Theorem but this is mostly used for solving algebraic or geometric problems.