Overview Number, EQUATION OF STRAIGHT LINE
Overview Number, EQUATION OF STRAIGHT LINE
Concepts
VARIABLES
Variables play an important role in economic theories and models. A variable is a magnitude
of interest can be defined and measured. In other words a variable is something whose
magnitude can change. It assumes different values at different times or places. Variables that
are used in economics are income, expenditure, saving, interest, profit, investment,
consumption, imports, exports, cost and so on. It is represented by a symbol.
Variables can be endogenous and exogenous. An endogenous variable is a variable that is
explained within a theory. An exogenous variable influences endogenous variables, but the
exogenous variable itself is determined by factors outside the theory.
FUNCTION
A 'function' explains the relationship between two or more economic variables. A simple
technical term is used to analyze and symbolizes a relationship between variables. It is called
a function. It indicates how the value of dependent variable depends on the value of
independent or other variables. It also explains how the value of one variable can be found by
specifying the value of other variable.
For instance, economist generally links demand for good depends upon its price. It is
expressed as D = f (P). Where D = Demand, P = Price and f = Functional relationship.
EQUATIONS
Economic theory is a verbal expression of the functional relationships between economic
variables. When the verbal expressions are transformed into algebraic form we get Equations.
The term equation is a statement of equality of two expressions or variables. The two
expressions of an equation are called the sides of the equation. Equations are used to calculate
the value of an unknown variable. An equation specifies the relationship between the
dependent and independent variables. Each equation is a concise statement of a particular
relation.
For example, the functional relationship between consumption (C) and income (Y) can take
different forms. The most simple equation; C = a (Y) states that consumption (C) is related to
income (Y). It says nothing about the form that this relation takes.
Here ‘a’ is constant and it has a value greater than zero but less than one (0<a<1). Thus the
equation shows that C is a constant proportion of income. For instance, if ‘a’ is 1/2then the
consumer would always spend 50% of the income on consumption. The equation shows that
if income is zero, consumption will also be zero.
C = a + b Y is yet another form of consumption function. Here value of a is positive and b is
0<b<1.
GRAPHS AND DIAGRAMS
A graph or a diagram presents the relationship between two or more sets of data or variables
that are related to one another. Graph is the most commonly used tool in modern economics.
Graph depicts the functional relationship between two or more economic variables. The use
of graph provides a better understanding of the economic generalizations. Graph presents a
visual picture of an abstract idea. Also, it is useful for accuracy and precision.
Graph can be drawn only two-dimensional figures on a plain paper. It represents the values of
only two variables at a time. The common method of constructing a graph or a diagram is
described below:
Calculus
It is a branch of mathematics that deals with the study of Change and motion. In economics
Calculus is used to model and analyse various economic concepts such as optimisation
problems, marginal concepts and production functions.
Linear Algebra
It is a branch of mathematics that deals with the study of vector spaces and linear equations.
In economics, it is used to model and analyse the system of linear equations such as input-
output models, general equilibrium models and production functions.
Optimisation Techniques
They are used to model and analyse decision making behaviour of individuals, firms or
policymakers.
Integers
The word integer originated from the Latin word “Integer” which means whole or intact.
Integers is a special set of numbers comprising zero, positive numbers and negative numbers.
Types of Integers
Integers come in three types:
Zero (0)
Positive Integers (Natural numbers)
Negative Integers (Additive inverse of Natural Numbers)
Zero
Zero is neither a positive nor a negative integer. It is a neutral number i.e. zero has no sign (+
or -).
Positive Integers
The positive integers are the natural numbers or also called counting numbers. These integers are
also sometimes denoted by Z+. The positive integers lie on the right side of 0 on a number line.
Z+ → 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25,
26, 27, 28, 29, 30,….
Negative Integers
The negative integers are the negative of natural numbers. They are denoted by Z–. The
negative integers lie on the left side of 0 on a number line.
As we have already discussed the three categories of integers, we can easily represent them
on a number line based on positive integers, negative integers and zero.
Zero is the centre of integers on a number line. Positive integers lie on the right side of zero
and negative integers lie on the left. See the below figure.
Rules of Integers
Rules defined for integers are:
Sum of two positive integers is an integer
Sum of two negative integers is an integer
Product of two positive integers is an integer
Product of two negative integers is an integer
Sum of an integer and its inverse is equal to zero
Product of an integer and its reciprocal is equal to 1
Addition of integers
Subtraction of integers
Multiplication of integers
Division of integers
Addition of Integers
While adding the two integers with the same sign, add the absolute values, and write down
the sum with the sign provided with the numbers.
For example,
While adding two integers with different signs, subtract the absolute values, and write down
the difference with the sign of the number which has the largest absolute value.
For example,
(-4) + (+2) = -2
Subtraction of Integers
While subtracting two integers, change the sign of the second number which is being
subtracted, and follow the rules of addition.
For example,
(-7) – (+4) = (-7) + (-4) = -11
Multiplication of Integers
If both the integers have the same sign, then the result is positive.
If the integers have different signs, then the result is negative.
For example,
(+2) x (+3) = +6
(+3) x (-4) = – 12
Thus, we can summarise the multiplication of two integers with examples in the below table.
+×+ + 3 × 4 = 12
+×– – 3 × -4 = -12
–×+ – -3 × 4 = -12
–×– + -3 × -4 = 12
Division of Integers
If both the integers have the same sign, then the result is positive.
If the integers have different signs, then the result is negative.
Similarly
(+6) ÷ (+2) = +3
(-16) ÷ (+4) = -4
+÷+ + 15 ÷ 3 = 5
+÷– – 15 ÷ -3 = -5
–÷+ – -15 ÷ 3 = -5
–÷– + -15 ÷ -3 = 5
Properties of Integers
1. Closure Property
2. Associative Property
3. Commutative Property
4. Distributive Property
5. Additive Inverse Property
6. Multiplicative Inverse Property
7. Identity Property
Closure Property
According to the closure property of integers, when two integers are added or multiplied
together, it results in an integer only. If a and b are integers, then:
a + b = integer
a x b = integer
Examples:
2 + 5 = 7 (is an integer)
2 x 5 = 10 (is an integer)
Commutative Property
According to the commutative property of integers, if a and b are two integers, then:
a+b=b+a
axb=bxa
Examples:
3 + 8 = 8 + 3 = 11
3 x 8 = 8 x 3 = 24
But for the commutative property is not applicable to the subtraction and division of integers.
Associative Property
a+(b+c) = (a+b)+c
ax(bxc) = (axb)xc
Examples:
2+(3+4) = (2+3)+4 = 9
2x(3×4) = (2×3)x4 = 24
Distributive property
a x (b + c) = a x b + a x c
LHS = 3 x (5 + 1) = 3 x 6 = 18
RHS = 3 x 5 + 3 x 1 = 15 + 3 = 18
Since, LHS = RHS
Hence, proved.
a + (-a) = 0
a x (1/a) = 1
a+0 = a
ax1=a
Applications of Integers
Integers are not just numbers on paper; they have many real-life applications. The effect of
positive and negative numbers in the real world is different. They are mainly used to
symbolize two contradicting situations.
For example, when the temperature is above zero, positive numbers are used to denote
temperature, whereas negative numbers indicate the temperature below zero. They help one
to compare and measure two things like how big or small or more or fewer things are and
hence can quantify things.
Some real-life situations where integers come into play are player’s scores in golf, football
and hockey tournaments, the rating of movies or songs, in banks credits and debits are
represented as positive and negative amounts respectively.
Rational Numbers?
The word 'rational' originated from the word 'ratio'. So, rational numbers are well
related to the concept of fractions which represent ratios. In other words, If a
number can be expressed as a fraction where both the numerator and the
denominator are integers, the number is a rational number.
Rational Numbers Definition
A rational number is a number that is of the form p/q where p and q are integers
and q is not equal to 0.
Set of Rational Numbers
If a number can be expressed as a fraction where both the numerator and the
denominator are integers, the number is a rational number. Some examples of
rational numbers are as follows.
56 (which can be written as 56/1)
0 (which is another form of 0/1)
1/2
√16 which is equal to 4
-3/4
0.3 or 3/10
-0.7 or -7/10
0.141414... or 14/99
Types of Rational Numbers
The different types of rational numbers are given as follows.
Integers like -2, 0, 3, etc., are rational numbers.
Fractions whose numerators and denominators are integers like 3/7, -6/5, etc., are
rational numbers.
Terminating decimals like 0.35, 0.7116, 0.9768, etc., are rational numbers.
Non-terminating decimals with some repeating patterns (after the decimal point)
such as 0.333..., 0.141414..., etc., are rational numbers. These are popularly
known as non-terminating repeating decimals.
How to Identify Rational Numbers?
Rational numbers can be easily identified with the help of the following
characteristics.
All integers, whole numbers, natural numbers, and fractions with integers are
rational numbers.
If the decimal form of the number is terminating or recurring as in the case of 5.6
or 2.141414, we know that they are rational numbers.
In case, the decimals seem to be never-ending or non-recurring, then these are
called irrational numbers. As in the case of √5 which is equal to
2.236067977499789696409173... which is an irrational number.
Another way to identify rational numbers is to see if the number can be expressed
in the form p/q where p and q are integers and q is not equal to 0.
Yes, 0 is a rational number as it can be written as a fraction of integers like 0/1, 0/-
2,... etc. In other words, 0/5 = 0, 0/-2 = 0, 0/1 = 0, and so on.
Adding and Subtracting Rational Numbers
For adding and subtracting rational numbers, we use the same rules of addition and
subtraction of integers. Let us understand this with the help of an example.
Example: Solve 1/2 - (-2/3)
Solution: Let us solve this using the following steps:
Step 1: As we simplify 1/2 - (-2/3), we will follow the rule of addition and
subtraction of numbers which says that the subtraction fact can change to an
addition fact and the sign of the subtrahend gets reversed. This will make it 1/2 +
2/3
Step 2: Now, we need to add these fractions 1/2 + 2/3
Step 3: Using the rules of addition of fractions, we will convert the given
fractions to like fractions to get common denominators so that it becomes easier to
add them. For this, we need to find the LCM of the denominators 2 and 3 which is
6. Then we will convert the fractions to their respective equivalent fractions which
will make them 3/6 + 4/6. This will give the sum as 7/6 which can be written in
the form of a mixed fraction 116116
Multiplying and Dividing Rational Numbers
The multiplication and division of rational numbers can be done in the same way as
fractions. To multiply any two rational numbers, we multiply their numerators and
their denominators separately and simplify the resultant fraction. Let us understand
this with the help of an example.
Example: Multiply 3/5 × -2/7
Solution: Let us solve this using the following steps:
Step 1: In order to multiply 3/5 × (-2)/7, we will first multiply the numerators and
then multiply the denominators.
Step 2: In this case, when we multiply the numerators, it will be 3 × (-2) = -6.
Step 3: When we multiply the denominators, it will be 5 × 7 = 35. Therefore, the
product will be -6/35.
When we need to divide any two fractions, we multiply the first fraction (which is
the dividend) by the reciprocal of the second fraction (which is the divisor). Let us
understand this with the help of an example.
Example: Divide 3/5 ÷ 2/7
Solution: Let us solve this using the following steps:
Step 1: In order to divide 3/5 ÷ 2/7, we will first write the reciprocal of the second
fraction. This will make it 3/5 × 7/2
Step 2: Now, we will multiply the numerators This will be 3 × 7 = 21.
Step 3: Then, we will multiply the denominators, it will be 5 × 2 = 10. Therefore,
the product will be 21/10 or 2110
Irrational Numbers?
Irrational numbers are the set of real numbers that cannot be expressed in the form of
a fraction, p/q where p and q are integers. The denominator q is not equal to zero (q ≠ 0).
Also, the decimal expansion of an irrational number is neither terminating nor repeating.
Irrational numbers are real numbers that cannot be represented as a simple fraction. These
cannot be expressed in the form of ratio, such as p/q, where p and q are integers, q≠0. It is a
contradiction of rational numbers.
Given below are the few specific irrational numbers that are commonly used.
We know that the irrational numbers are real numbers only which cannot
be expressed in the form of p/q, where p and q are integers and q ≠ 0. For
example, √ 5 and √ 3, etc. are irrational numbers. On the other hand, the
numbers which can be represented in the form of p/q, such that, p and q
are integers and q ≠ 0, are rational numbers. Here are some tricks to
identify irrational numbers.
The numbers that are not perfect squares, perfect cubes, etc are irrational. For
example √2, √3, √26, etc are irrational. But √25 (= 5), √0.04 (=0.2 = 2/10), etc are
rational numbers.
The numbers whose decimal value is non-terminating and non-repeating patterns
are irrational. For example √2 = 1.4142135623730950488016887242097.... is
irrational, whereas 1/7 = 0.14285714285714285714285714285714... is rational as
we can observe that "142857" is keep getting repeated in the decimal portion.
Set of Irrational Numbers
Set of irrational numbers can be obtained by writing all irrational numbers within
brackets. But we know that there are infinite number of irrational numbers. So we
cannot list the entire set of irrational numbers. But here are a few subsets of set of
irrational numbers.
All square roots which are not a perfect squares are irrational numbers. Example:
{√2, √3, √5, √8}
Euler's number, Golden ratio, and Pi are some of the famous irrational numbers.
Example: {e, ∅, ㄫ}
The square root of any prime number is an irrational number. Example: {√2, √3,
√5, √7, √11, √13, ...}
π 3.14159265....
e 2.7182818.....
√2 1.414213562...
√3 1.73205080...
√5 2.23606797....
√7 2.64575131....
√11 3.31662479...
√13 3.605551275...
-√3/2 -0.866025....
∛47 3.60882608
Real Numbers
Definition
Real numbers can be defined as the union of both rational and irrational numbers. They can
be both positive or negative and are denoted by the symbol “R”. All the natural numbers,
decimals and fractions come under this category. See the figure, given below, which shows
the classification of real numerals.
Whole Collection of zero and natural numbers. All numbers including 0 such as 0, 1, 2, 3, 4, 5,
Numbers W = {0, 1, 2, 3,…..} 6,…..…
The collective result of whole numbers and Includes: -infinity (-∞),……..-4, -3, -2, -1, 0, 1,
Integers
negative of all natural numbers. 2, 3, 4, ……+infinity (+∞)
Rational Numbers that can be written in the form of p/q, Examples of rational numbers are ½, 5/4 and
Numbers where q≠0. 12/6 etc.
Irrational The numbers which are not rational and cannot Irrational numbers are non-terminating and
Numbers be written in the form of p/q. non-repeating in nature like √2.
Commutative property
Associative property
Distributive property
Identity property
Consider “m, n and r” are three real numbers. Then the above properties can be described
using m, n, and r as shown below:
Commutative Property
If m and n are the numbers, then the general form will be m + n = n + m for addition and m.n
= n.m for multiplication.
Distributive Property
For three numbers m, n, and r, which are real in nature, the distributive property is
represented as:
m (n + r) = mn + mr and (m + n) r = mr + nr.
Example of distributive property is: 5(2 + 3) = 5 × 2 + 5 × 3. Here, both sides will yield 25.
Identity Property
There are additive and multiplicative identities.
Imaginary Numbers
Definition
Imaginary numbers are the numbers when squared it gives the negative result. In other words,
imaginary numbers are defined as the square root of the negative numbers where it does not
have a definite value. It is mostly written in the form of real numbers multiplied by the
imaginary unit called “i”.
Let us take an example: 5i
Where
5 is the real number and i is the imaginary unit.
When this number 5i is squared, we will get the negative result as -25. Because the value of
i 2 is -1. This means that the √-1 = i.
The notation “i” is the foundation for all imaginary numbers. The solution written by using
this imaginary number in the form a+bi is known as a complex number. In other words, a
complex number is one which includes both real and imaginary numbers.
Slope/Gradient
The slope of a line is also called the gradient of that line.
The gradient of a line tells you how steep the line is. For every one unit moved to the right,
the gradient will tell you how much the line moves up or down. It is calculated by dividing
the change in the y co-ordinate by the change in the x co-ordinate.
𝑔𝑟𝑎𝑑𝑖𝑒𝑛𝑡(𝑚)=𝑦−𝑐ℎ𝑎𝑛𝑔𝑒/𝑥−𝑐ℎ𝑎𝑛𝑔𝑒 or
The direction in which the line is sloping is important. The straight line upward sloping has a
positive gradient, m 0. A downwards-sloping line has a negative gradient.
Gradients
The effect of the gradient on the slope of the graph is illustrated by the following cases.
1 m 1
In this case the gradient is positive and equal to 1. This means that the line is upwards sloping
and has a 1 in 1 gradient – the rise is equal to the step.
2 m 1
The gradient is positive and greater than 1. The line is upwards sloping and the rise is greater
than the step.
3 0 1 m
The gradient is positive but it is less than 1. The line is upward-sloping, but it is shallow. The
rise is less than the step.
4 m 1
The gradient is negative and is equal to 1. The line is downwards sloping and the rise is
equal to the step.
5 m 1 The gradient is negative but its size is greater than 1. It is a steep downwards-
sloping line with the rise larger than the step.
6 1 0 m The gradient is negative but its size is less than 1. It is a shallow downwards-
sloping line with the rise less than the step.
Conclusion
The effect of the gradient on a line is to alter its orientation, determining whether it is
forwards or backwards sloping, and whether it is a steep line or a shallow one. We call the
gradient m a parameter. The conclusion is that the orientation of a line depends on the
parameter m.
The intercept
There is another parameter that determines the position of a line. It is called the intercept. In
the above equation it is symbolised as C.