Pre-Math 2 ECON2310

• A continuous function is the one that can be drawn without lifting a pencil from
the paper.
• A smooth function is one that has no kinks or corners.
• A monotonic function is one that always increases or decreases.
• A positive monotonic function always increases as x increases.
• A negative monotonic function always decreases as x increases.

Example:
1) y = 5 x is a positive monotonic function. It is also a continuous and smooth function.

x y
-2 -10
-1 -5
0 0
1 5
2 10
3 15
4 20

2) y = 10 − 2 x is a negative monotonic function. It is also a continuous and smooth

function.

x y
0 10
1 8
2 6
3 4
4 2
5 0

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Pre-Math 2 ECON2310

• Inverse function: in a function for each value of x there is a unique value of y.

Monotonic function is always increasing or always decreasing. Therefore, for a
monotonic function, for each value of y there will be a unique value of x. The
function that relates x to y in this way is an inverse function.

Example:

1) y = 5 x is a monotonic function. Now divide both side of the equation by 5 to get:

1 5 1 1
y = x ⇒ y = 1x ⇒ x = y is the inverse function.
5 5 5 5

2) y = x 2 is not a monotonic function. Therefore, it won’t have a reverse function. To

see this, note that − y = x, + y = x both have the property that their square is equal to
y.
− y = x ⇒ square both side ⇒ y = x 2

+ y = x ⇒ square both side ⇒ y = x 2

So there is no unique value of x associated with each value of y. Therefore, this function
is not monotonic, but it is continuous and smooth.

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Pre-Math 2 ECON2310

3) The quantity demanded is a function of price, however, the demand functions are
usually depicted with the price on the vertical axis and the quantity demanded on the
horizontal axis (i.e. this is called inverse demand function).
1 1 1
q = 10 − p ⇒ q + p = 10 ⇒ p = 10 − q ⇒ p = 20 − 2q
2 2 2

• Solution to an equation is a value of x that satisfies the equation.

Example:
5 10
1) 5 x = 10 ⇒ divide both sides by 5 ⇒ x = ⇒x=2
5 5
2) x 2 = 9 ⇒ get square root of both sides ⇒ x = ± 3

• And identity is a relation between variables that holds for all values of the
variables.
Example:
1) 5( x + y ) = 5 x + 5 y
2) 2(2 x + 1) = 4 x + 2
3) (x − y )2 = x 2 −2 xy + y 2

• Linear function is a function of the form:

y = ax + b , where x, y are variables and a, b are parameters.

Example:
1) y = 5 x − 10
2) y = 15 − 5 x
3) 2 x + y = 10 ⇒ subtract 2x from both side ⇒ 2 x + y − 2 x = 10 − 2 x ⇒ y = 10 − 2 x

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Pre-Math 2 ECON2310

• Changes in x is shown by ∆x. If x goes from the value of x1 to x2 then it can be

shown as: ∆x= x2- x1.
• Changes in y is shown by ∆y. If y goes from the value of y1 to y2 then it can be
shown as: ∆y= y2-y1.
∆y
• A rate of change is the ratio of two changes:
∆x
Example:
1) For a function y = ax + b value of y at x1 is y1 = ax1 + b and value of y at x2 is y 2 = ax 2 + b .
Changes in x is: ∆x = x 2 − x1 and changes in y with respect to changes in x is: ∆y = y 2 − y1 or
we can substitute for y1 and y2 to get: ∆y = (ax2 +b ) − (ax1+b )
Then the rate of change can be calculated as:
∆y y 2 − y1 ( ) (
ax 2 + b − ax1 + b )
ax + b − ax1 − b a x 2 − x1 ( )
= = = 2 = =a
∆x x 2 − x1 x 2 − x1 x 2 − x1 x 2 − x1 ( )
( ) ( )
2) For a function y = x 2 value of y at x1 is y1 = x1 2 and value of y at x2 is y 2 = x 2 2 .
Changes in x is: ∆x = x 2 − x1 and changes in y with respect to changes in x is: ∆y = y 2 − y1 or
we can substitute for y1 and y2 to get: ∆y = (x 2 )2 − (x1 )2
Then the rate of change can be calculated as:
∆y y 2 − y1 ( ) ( )
x 2 2 − x1 2 (
x 2 + x1 x 2 − x1 )( ) 67 x2
8
= = = = x 2 + x1 = x1 + ∆x + x1 = 2 x1 + ∆x
∆x x 2 − x1 x 2 − x1 x 2 − x1 ( )
3) For our previous example let’s assume that x changes by the amount of ∆x. So x1=x
and x2=x+ ∆x. Then value of y at x1 and x2 can be calculated as: y1 = (x1 )2 = (x )2 and
( )
y 2 = x 2 2 = (x + ∆x )2 . Changes in x is: ∆x = x 2 − x1 = x + ∆x − x = ∆x and changes in y with
respect to changes in x is: ∆y = y 2 − y1 or we can substitute for y1 and y2 to get:
∆y = (x + ∆x )2 − (x )2
Then the rate of change can be calculated as:
⎡ x 2 + 2 x.(∆x ) + (∆x )2 ⎤ − x 2
∆y y 2 − y1 (x + ∆x )2 − (x )2 ⎢⎣ ⎥⎦ 2 x.(∆x ) + (∆x )2
= = = =
∆x x 2 − x1 x + ∆x − x ∆x ∆x
= 2 x + ∆x

Here the rate of change from x to x+ ∆x depends on the value of x and on the size of the
change ∆x. But if we assume very small changes in x, then ∆x will be almost zero, so the
rate of change of y with respect to x will be approximately 2x.

• Slope: the rate of change of a function can be interpreted graphically as the slope
of the function.
• The vertical intercept of a function is the value of y when x=0.
• The horizontal intercept of a function is the value of x when y=0.

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Pre-Math 2 ECON2310

Example:
1) For y = 10 − 2 x the value of y at x1 is y1 = 10 − 2 x1 and the value of y at x2 is y 2 = 10 − 2 x 2 .
Changes in x is: ∆x = x 2 − x1 and changes in y with respect to changes in x is: ∆y = y 2 − y1 or
we can substitute for y1 and y2 to get: ∆y = (10 − 2 x 2 ) − (10 − 2 x1 )
Then the rate of change can be calculated as:
( ) ( )
∆y y 2 − y1 10 − 2 x 2 − 10 − 2 x1 10 − 2 x 2 − 10 + 2 x1 − 2 x 2 − x1( )
= = = = = −2
∆x x 2 − x1 x 2 − x1 x 2 − x1 (
x 2 − x1 )
Here the rate of change does not depend on x and it is constant and equal to -2.
To get the vertical intercept set x=0 ⇒ y = 10 − 2 × 0 = 10
To get the horizontal intercept set y=0 ⇒ 0 = 10 − 2 x ⇒ 10 = 2 x ⇒ x = 5

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Pre-Math 2 ECON2310

2) For y = x 2 let’s assume that x changes by the amount of ∆x. Therefore, changes in x
is: ∆x and changes in y with respect to changes in x is: ∆y = (x + ∆x )2 − (x )2
Then the rate of change can be calculated as:
⎡ x 2 + 2 x.(∆x ) + (∆x )2 ⎤ − x 2
∆y
==
( x + ∆x )2 − (x )2 ⎢⎣
=
⎥⎦
=
2 x.(∆x ) + (∆x )2
∆x x + ∆x − x ∆x ∆x
= 2 x + ∆x

Here the rate of change from x to x+ ∆x depends on the value of x and on the size of the
change ∆x. But if we assume very small changes in x, then ∆x will be almost zero, so the
rate of change of y with respect to x will be approximately 2x.
Here, therefore, the slope depends on the value of x and for different values of x we will
have different values for slope.