ECO 4351 Mathematical Economics, Spring, 2006

Thursday, 7:00-9:45, GR 3.606

Instructor: Dan O’Brien

Office: GR 3.824
Office Hours: Thursday 5:00-6:30 PM or by appointment
Phone: 972-883-4700
Email: obri@utdallas.edu

Teaching Assistant: Raina Hossain

Office: GR2.822
Office Hours: Tuesday 5-6 PM or by appointment
Phone: 972-883-2935
Email: rzh051000@utdallas.edu

Text: Fundamental Methods of Mathematical Economics by Alpha C. Chang

This course is designed to introduce the student to, and give the student hands on experience
with, a wide range of mathematical techniques used in senior undergraduate and graduate level
economics courses. Topics include the tools used to analyze equilibrium models, comparative-
static models, optimization, and, to a limited extent, dynamic models. The course will
extensively employ algebra and basic calculus, although there will be a review of basic
techniques such as differentiation and integration as these skills are required.

The schedule is an ambitious one; we may adjust the list of topics, particularly those at the end of
the semester, based on the time required to gain a thorough understanding of each technique and
approach.

Date Topics Reading/Study

Jan.12 Review Chapter 1
Static Analysis Chapter 2
Real numbers
Sets, set notation, set operations,
Relations and functions
Equilibrium analysis Chapter 3
Linear model and solutions
Non-linear model
The quadratic formula
Finding roots
General equilibrium

Jan. 19 Matrix Algebra Chapter 4

Matrices, arrays, vectors
Matrix operations
Commutative, associative, distributive laws
Transposes, inverses

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 ECO 4351 Mathematical Economics, Spring, 2006

Jan. 26 Linear Models Chapter 5

Nonsingularity
Determinants
LaPlace expansion
Matrix inversion
Cramer’s rule
Input-output model (discussion)

Feb. 2 Comparative Statics Chapter 6

The derivative
Limit theories
Review inequalities and absolute values
Continuity, differentiability

Feb. 9 Rules of differentiation and their uses Chapter 7

The rules
Partial differentiation and techniques
Jacobian determinants

Feb. 16 Comparative static analysis Chapter 8

Differentials and derivatives
Total differentials
Review of the rules of differentials
Total derivatives
Implicit functions/implicit function theorem

Feb. 23 Optimization Chapter 9

First and second derivative tests
McClaurin and Taylor series

Mar. 2 Exponential and logarithmic functions Chapter 10

Bases and exponential functions
Log and natural log
Derivatives
Applications

Mar. 16 Functions of two or more variables Chapter 11.1-11.5

Finding maximum/minimum
Quadratic forms
Characteristic roots
Concavity and convexity
Differentiability

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Mar. 23 Functions of two or more variables (cont.) Chapter 11.6-11.7

Applications
Reduced form models
General form models
Optimization with constraints Chapter 12.1-12.5
Lagrange multiplier
Quasiconcavity
Quasiconvexity

Mar. 30 Optimization with constraints (cont.) Chapert 12.6-12.8

Applications
Homogeneity
Euler’s theorem
Homotheticity
Cobb-Douglas functions
CES functions

Apr. 6 Dynamics and Integration Chapter 13

Rules of integration
Definite integrals
Applications

Apr. 13 First order differential equations Chapter 14

Apr. 20 First order difference equations Chapter 16

Apr. 27 Final Exam

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Although attendance on lecture/discussion days is not required, class attendance is important for
at least three reasons. We will have in-class exercises designed to reinforce techniques described
in the text and in class. Also, student learning is invariably enhanced by interaction with other
students, and by questions asked and discussed by students and the instructor. It is my
experience that class attendance and test scores are highly correlated. If your final grade is near
the top of a grade range, I will consider class attendance and participation when assigning your
course grade.

Homework problems will be assigned regularly, usually weekly, and will constitute the bulk of
your grade in the course. You are encouraged to form groups to work on the homework. Each
homework assignment will be due at the beginning of the class following the one in which it is
assigned. The homework will be graded; we will review each assignment in class. Late
homework will be given a maximum grade of ½ the normal grade for that assignment. The
homework must be in your own handwriting or be your own original computer work.

The University’s policy on academic dishonesty, such as cheating on exams or plagiarism, will
be strictly enforced. If you have a question concerning potential violations, please contact me at
once.

In addition to the homework, there will be a single final exam. Course grades will be curved by
normalizing the highest score to 100%, then:

98-100 (or more) = A+

92-97% = A
90-91% = A-
88-89% = B+
82-87% = B
80-81% = B-
78-79% = C+
72-77% = C
70-71% = C-
68-69% = D+
62-67% = D
60-61% = D-
less than 60 = F

Exams and homework will be weighted as follows:

Class Participation and In-Class Assignments 10%

Homework 75%
Final Exam 15%