Limits and the Derivative

ECON 441: Introduction to Mathematical Economics
Lecture 8

Div Bhagia

(Hypothetical) Production Function for Grades

An upward-sloping curve for y equals x squared plus 20, on axes with hours studied across and grades up, rising from 20 at zero hours to 120 at ten hours and getting steeper as hours increase

\[y=f(x)=x^{2}+20\]

How much can your grade increase if you study for one additional hour per week?

Depends on how much you are studying right now!

Average Rate of Change

Use \(\Delta\) to denote change: \[\Delta x=x_{1}-x_{0}\]

Change in \(y\) per unit change in \(x\): \[\frac{\Delta y}{\Delta x}=\frac{f\left(x_{0}+\Delta x\right)-f\left(x_{0}\right)}{\Delta x}\]

Average Rate of Change

\[y=f(x)=x^{2}+20\]

What happens if you go from 6 to 8 hours of studying? \[x_0 = 6, \; x_1 = 8 \; \rightarrow \; \Delta x = x_{1}-x_{0}=2\]

Total change in grades: \[f(x_0+\Delta x) - f(x_0) = \hspace{4em}\]

Per hour change in grade: \[\frac{\Delta y}{\Delta x}=\frac{f\left(x_{0}+\Delta x\right)-f\left(x_{0}\right)}{\Delta x} = \hspace{4em}\]

The Derivative

Usually we are interested in minuscule changes from \(x_0\).

The derivative of a function is defined as: \[\frac{d y}{d x} = f'(x)= \lim_{\Delta x \rightarrow 0} \frac{\Delta y}{\Delta x}\]

Note that \[\frac{\Delta y}{\Delta x}=\frac{f\left(x_{0}+\Delta x\right)-f\left(x_{0}\right)}{\Delta x}\]

The Derivative

For the function \(y=f(x)=x^{2}+20\): \[\begin{aligned} \frac{\Delta y}{\Delta x}&=\frac{f\left(x_{0}+\Delta x\right)-f\left(x_{0}\right)}{\Delta x} \\ &= \frac{(x_0+\Delta x)^2+20-(x_0^2+20)}{\Delta x} \\ &= \frac{x_0^2+ (\Delta x)^2+2 x_0 \Delta x-x_0^2}{\Delta x} \\ &= 2 x_0 + \Delta x \end{aligned}\]

Then the derivative is \[\frac{d y}{d x} = f'(x_0)= \lim_{\Delta x \rightarrow 0} \, (2 x_0 + \Delta x) = 2 x_0\]

The Derivative

The derivative: \[\frac{d y}{d x} = f'(x_0)= \lim_{\Delta x \rightarrow 0} \frac{f\left(x_{0}+\Delta x\right)-f\left(x_{0}\right)}{\Delta x}\]

Alternatively, \[\frac{d y}{d x} = f'(x_0)= \lim_{x \rightarrow x_0} \frac{f(x)-f(x_{0})}{x-x_0}\]

The Derivative

For the function \(y=f(x)=x^{2}+20\): \[\begin{aligned} \frac{d y}{d x}&= \lim_{x \rightarrow x_0} \frac{f(x)-f(x_{0})}{x-x_0} \\ &= \lim_{x \rightarrow x_0} \frac{x^2+20-x_0^2-20}{x-x_0} \\ &= \lim_{x \rightarrow x_0} \frac{x^2-x_0^2}{x-x_0} \\ &= \lim_{x \rightarrow x_0} \, (x+x_0) = 2x_0 \end{aligned}\]

Derivative = Slope of the Tangent Line

\[y=f(x)=x^{2}+20 \; \rightarrow \; f'(x) = 2x\]

The same curve for y equals x squared plus 20, with a dashed straight line touching it at the point where x is 6 and y is 56; the tangent line has slope 12, which is f prime of 6

Concept of a Limit

We say that \(L\) is the limit of \(f(x)\) at \(a\), i.e. \[\lim_{x \rightarrow a} f(x) = L\] if \(f(x)\) approaches \(L\) as \(x\) approaches \(a\) from any direction.

Note that we don’t actually set \(x=a\).

Also, for the limit to exist at a point we need the function to approach the same value from both directions.

Concept of a Limit

Left-side limit: if \(x\) approaches \(a\) from the left side \[\lim_{x \rightarrow a^-} f(x)\]

Right-side limit: if \(x\) approaches \(a\) from the right side \[\lim_{x \rightarrow a^+} f(x)\]

Only when both the left-side and right-side limits have a common finite value do we say that the limit exists.

Example: Limit Doesn’t Exist

A curve in two pieces with a gap at x equals zero: the left piece rises and stops just below the value 5, and the right piece starts just above the value 7 and keeps rising, with open circles at both ends showing the function jumps from 5 to 7

Limit: Another Example

\[f(x) = \frac{4x-4}{\left|x-1\right|}\]

\[\lim_{x \rightarrow 1^-} f(x) = \hspace{6em}\]

\[\lim_{x \rightarrow 1^+} f(x) = \hspace{6em}\]

Limit: Another Example

The graph of f of x equals four x minus four over the absolute value of x minus one: a horizontal line at negative 4 for x less than 1 and a horizontal line at positive 4 for x greater than 1, with open circles at x equals 1 on both

Homework Questions

  • Exercise 6.2: 2, 3

Textbook reference: 6.2-6.4