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Lecture 1:
Topic: Introduction
Reading
H&P, Ch 4; 1.1
(For introductory material, see Ch 0, pp. 1016.)
Reading for this lecture
H&P, Ch 4, Sect 4.1; Ch 1.1 (modeling).
Homework for Tutorial in Week 2
Ex 4.1, p. 173, problems 1, 5, 15.
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Function
A function describes the relationship between
two or more variables.
Eg:
y = f(x)
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Variable
Something whose magnitude can change.
Y = a + bX
Y = endogenous / dependent variable
X = exogenous/ independent variable
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Types of Functions

Constant Function
A function whose range consists only of one
element.
Eg:
Y = a

Linear Functions
Eg:
Y = a + bX
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Types of Functions

A polynomial function
Y = a +bX + cX
2
+ dX
3
+ ….+ eX
n
A function involving a variable raised to some
power.

Quadratic Function – is a polynomial to the
degree two.
Y = a +bX + cX
2
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Types of Functions

Exponential Functions:
The exponent is a
variable.
Eg :
Y = b
x

Logarithmic Functions:
Eg: Y = log
b
X
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