Mathematical Economics, Microeconomics
Matrix Algebra for Economists: Operations, Determinants, Cramer’s Rule and Leontief Input-Output AnalysisAn economy is a web of industries feeding into one another — steel needs coal, coal needs steel, both need electricity. Wassily Leontief won a Nobel Prize...
Mathematical Economics, Microeconomics
Elasticity Mathematics: Point vs Arc Elasticity, Cross-Price Elasticity and the Lerner IndexElastic and inelastic get thrown around loosely, but elasticity is a precise number with a precise formula — and which formula you use changes the answer. Get the mathematics...
Mathematical Economics, Microeconomics
Partial Derivatives in Economics: Marginal Products, Multivariable Optimisation and the Chain RuleA firm chooses labour and capital. A consumer eats many goods. Demand depends on price, income and substitutes at once. The ordinary derivative handles one variable;...
Mathematical Economics, Microeconomics
The Cobb-Douglas Production Function: Returns to Scale, Elasticity and Cost MinimisationIn 1927 a future US senator and a mathematician noticed that labour’s share of American income had barely moved in decades. The equation they wrote to explain it — output...
Mathematical Economics, Microeconomics
Consumer Surplus and Producer Surplus: Integration, Welfare Triangles and Deadweight LossEvery time you would have happily paid more for something than you actually did, you pocketed the difference. Economists have a name for that quiet windfall — consumer surplus —...
Mathematical Economics, Microeconomics
Linear Programming in Economics and Business: The Graphical Method, Shadow Prices and SimplexIn 1947 George Dantzig solved a problem the US Air Force had considered computationally hopeless. His method now quietly routes your parcels, schedules airline crews, blends...
Mathematical Economics, Microeconomics
Derivatives in Economics: Marginal Cost, Marginal Revenue and Profit MaximisationHere is the secret that makes the second year of economics much easier than the first: every time a textbook says “marginal”, it means “derivative”. Marginal cost...
Financial Economics, Mathematical Economics, Microeconomics, Public Economics
Net Present Value: Discounting, Investment Appraisal and the Rate That Decides EverythingA pound today is worth more than a pound next year. Everyone nods at that. Almost nobody appreciates that the exact size of “more” — a single number chosen before any...
Financial Economics, Mathematical Economics, Microeconomics
Compound Interest: Simple vs Compound vs Continuous CompoundingEinstein almost certainly never called compound interest the eighth wonder of the world. The mathematics is remarkable enough without the endorsement — and once you see why the number e turns up uninvited,...
Consumer Choice, Mathematical Economics, Microeconomics
Introduction: Economics as Constrained Optimisation Nearly every proposition in microeconomics is the solution to the same mathematical problem. A consumer maximises utility subject to a budget. A firm minimises cost subject to an output requirement. A planner...
