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Learning Objectives:
INTRODUCTION
In this handout, we will be concerned primarily with analysis of the
relationship between two or more variables. We will be interested in the
relationship between economic entities or variables such as cost and
output, price and quantity in an analysis of demand and supply and
production and factors of production such as labour and capital.
FUNCTION
The concept of a function is fundamental in business and economics. A
function is a relationship between two or more variables where by value of
one variable [the dependent variable] is determined by the values taken by
the other variables [the independent variables]. The general notation for a
function is as follows.
Y = f [X, Z]
Where,
f [ ]: means ‘ is a function of ’
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LINEAR EQUATION/LINEAR FUNCTION
A mathematical statement setting two algebraic expressions equal to each
other is called an equation.
An equation in which all variables are raised to the first power is known as
a linear equation. A two variable linear function can be written as follows
Y = aX + b
Where, a, and b are two parameters which can be assigned fixed values.
The values of a, and b determine the exact form of the linear function. The
graph of a linear function is a straight line.
Y=0 X
0
X=0
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− The point where these lines intersect is known as the origin and is
denoted by letter 0.
− P, in terms of its coordinates, (x,y)
Y = aX + b
− The coefficients ‘a’ and ‘b’ in the linear equation have special
significance and can be related to features of its graph.
b
X=- (a ≠ 0).
a
− The coefficient ‘a’ in the equation defines the slope or gradient of the
straight line with that equation.
FIGUR
E
∆Y BC Y2 − Y1
Slope of the Line = = = =a
∆X AC X 2 − X1
SIMULTANEOUS EQUATIONS
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In mathematics, simultaneous equations are set of equations containing
multiple variables. This set is often referred to as a system of equations.
1. Graphical method
2. Metrics method
3. Substitutions method
4. Elimination method
Method of Substitution
The substitution method consist the following steps.
1. Solve one of the equations for Y in terms of X, or vice versa.
2. Substitute this expression into the other equation and solve for
other variable.
3. Use this value in one of the original equations and solve for the
other variables.
4. Check your answer in both equations
Method of Elimination
The elimination method consist the following steps.
1. Obtain coefficients for X and Y that differ only in sign by
multiplying each equation by suitably chosen non – zero constants.
2. Add the equations to eliminate one variable and solve the
resulting equation.
3. Either repeats the above steps with other variable or back –
substitute the vale just obtained into either of the original
equations and solve for the other variables.
References
1. Jerom F. Ernest, (2004),Business Mathematics,5th Edition, Mc Graw-
Hill
2. Robert L.Dasby,(2000),Business Mathematics Essentials, Prentice Hall
3. Andrew Kaplan, Carol Debold, Susan Rogalski,(2004),A Mathematics
Handbook,1st edition, Great Source Education Group
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