Topic 1

Limits and Sets

M.SC. (ECONOMICS)

MATHS AND STATISTICS

SEPTEMBER, 2017

Anuj Pratap Singh Trinity College Dublin

 Number System

 The Natural Numbers: The natural (or counting) numbers are 1, 2, 3, 4, 5, etc. There are infinitely
many natural numbers. The set of natural numbers, {1, 2, 3, 4, 5, ...}, is sometimes written N for short.

 The Whole numbers are the natural numbers together with zero (0).

 The Integers are the set of real numbers consisting of the natural numbers, their additive inverses and
zero. {..., -5, -4, -3, -2, -1, 0, 1, 2, 3, 4, 5...}. The set of integers is sometimes written J or Z for short.
The sum, product, and difference of any two integers is also an integer. But this is not true for
division... just try 1 ÷ 2.

 The Rational Numbers are those numbers which can be expressed as a ratio between two integers. For
example, the fractions 1/3 and –1111/8 are both rational numbers. All the integers are included in the
rational numbers, since any integer z can be written as the ratio z/1. All decimals which terminate are
rational numbers (since 8.27 can be written as 827/100.) Decimals which have a repeating pattern
after some point are also rational: for example, 0.083333333... = 1/12.

Anuj Pratap Singh Trinity College Dublin

 ..cont’d

 An Irrational Number is a number that cannot be written as a ratio (or fraction) of

integers. In decimal form, it never ends or repeats thus non-recurring and non-
terminating. The first such equation to be studied is 2 = x2. What number times itself
equals 2? √2 is about 1.414, because 1.4142 = 1.999396, which is close to 2. But you'll
never hit exactly by squaring a fraction (or terminating decimal). The square root of 2 is
an irrational number, meaning its decimal equivalent goes on forever.

 The Real Numbers is the set of numbers containing all of the rational numbers and all of
the irrational numbers. The real numbers are “all the numbers” on the number
line. There are infinitely many real numbers between any two real numbers just as there
are infinitely many numbers in each of the other sets of numbers.

Anuj Pratap Singh Trinity College Dublin

 Sequences

 A sequence is nothing more than a list of numbers written in a

specific order.

 There is a variety of ways of denoting a sequence. Each of the

following are equivalent ways of denoting a sequence.
𝑛=𝑛
{𝑎1 , 𝑎2 , 𝑎3 ,…𝑎𝑛 } and 𝑎𝑛 𝑛=0

Anuj Pratap Singh Trinity College Dublin

 Limits of a Sequence

If lim 𝑎𝑛 = 𝐿
𝑛→∞

we can make an as close to L as we want for all sufficiently large ‘n’. In other words, the value of the
an’s approach L as n approaches infinity.

Also,

We say that lim 𝑎𝑛 = 𝐿 if for every number ε>0 there is an integer N such that
𝑛→∞

If the sequence converges, the limit is unique.

Note that both definitions tell us that in order for a limit to exist and have a finite value all the
sequence terms must be getting closer and closer to that finite value as n increases.

Anuj Pratap Singh Trinity College Dublin

 Properties of Limits of a Sequence

For real convergent sequences ‘an’ and ‘bn’

 Property 1:

 Property 2: , where ‘c’ is a constant.

 Property 3:

 Property 4:

 Property 5: if an>bn then lim 𝑎𝑛 > lim 𝑏𝑛

𝑛→∞ 𝑛→∞

Anuj Pratap Singh Trinity College Dublin

 Sub-sequences

 A sub-sequence of a sequence (an) is an infinite collection of

numbers from (an) in the same order that they appear in that
sequence.
 If (an) is a sequence, such as 1/1 , 1/2 , 1/3 , 1/4 , … we may obtain a
subsequence by selecting some of the terms in the sequence. The
only rules are that the order of the terms in the original sequence
must be preserved and we must select an infinite number of terms.
For example, from the above sequence we may select b 1 = a 1 = 1 , b
2 = a 2 = 1/2 , b 3 = a 4 = 1/4 , b 4 = a 8 = 1/8 , and so on.

Anuj Pratap Singh Trinity College Dublin

 Vector Space

 A vector (or linear) space is a nonempty set of vectors obeying

specific rules regarding the operations “addition” and
“multiplication”.
 Vectors are used to represent quantities that have both a magnitude
and a direction.
 A representation of the vector 𝑣 = 𝑎1 , 𝑎2 in two dimensional space

is any directed line segment, 𝐴𝐵 , from the point A=(x,y) to the

point B=(x+a1,y+b1).
 A space is a set of objects which all look alike; say, matrices or
column vectors in 𝑅 2 .

Anuj Pratap Singh Trinity College Dublin

 ..cont’d

 With a vector space, adding two vectors or multiplying a vector by a scalar will yield another
vector in the space; that is, a vector space is closed under addition and scalar multiplication.

0
 There is a null vector, for 𝑅 2 , when you add this to a vector in the space, you get the same
0
vector.

 In this course we are primarily concerned with vectors in 𝑅 2 ; that is, the vector space of all
𝑎
vectors of the form , where ‘a’ and ‘b’ are scalars.
𝑏
 However, if v є 𝑅 𝑛 , interpret this as all components of the n dimensional vector. For example, we
live in 𝑅3 space; think of the room you are in as in terms of a three-dimensional space.

 As an example, vectors in economics are used to represent consumption of each good; for

1
example might represent 1 unit of the first good and two units of the second.
2

Anuj Pratap Singh Trinity College Dublin

 Operations on Vectors

 Geometrically, vectors are just like directed lines in the usual x-y
plane and we can add and subtract them with the triangle and
1 2
parallelogram rules. The addition of two vectors, say and , is
2 3
3
just the sum of the individual components; that is .
5
1 α
 Multiplying a vector by a scalar, say by α gives .
2 2α
 For two vectors ‘v’ and ‘u’, they are parallel if v = α u (i.e., one is a
scalar multiple of another and a>0).

Anuj Pratap Singh Trinity College Dublin

 Euclidian Inner Product

 An inner product enables us to find the lengths of vectors and the angle and distance between
two vectors.

 In a vector space, it is a way to multiply vectors together, with the result of this multiplication
being a scalar.

 The Euclidian space 𝑅 𝑛 , is where the inner product is given by the dot product:

 Euclidean Norm (Distance Metric): The norm of a vector ‘x’ is the square root of the scalar:

whereas the Euclidean distance between any two vectors x and y is just the norm of x-y.

Anuj Pratap Singh Trinity College Dublin

 ..cont’d

 In another way, the inner product of vectors x and y in a

vector space is:
𝑥, 𝑦 ≡ x.y = 𝑥𝑖 𝑦𝑖 = 𝑥 𝑇 𝑦
 Two vectors u and v whose dot product is u.v=0 (i.e., the
vectors are perpendicular) are said to be orthogonal.
 Already, then, we can write the standard consumer
optimization problem as:

max 𝑢 𝑥
s.t. 𝑥 𝑇 𝑦 ≤ 𝑚
𝑥

Anuj Pratap Singh Trinity College Dublin

 Set Theory

A set A is a collection of elements or members. If all the members of set A are also members of set B, then A is a
subset of B, denoted A ⊂ B. For example, {1,2} is a subset of {1,2,3} , but {1,4} is not.

 Union of the sets A and B, denoted A ∪ B, is the set of all objects that are a member of A, or B, or both. The
union of {1, 2, 3} and {2, 3, 4} is the set {1, 2, 3, 4} .

 Intersection of the sets A and B, denoted A ∩ B, is the set of all objects that are members of both A and B. The
intersection of {1, 2, 3} and {2, 3, 4} is the set {2, 3} .

 Set difference of B and A, denoted B \ A, is the set of all members of B that are not members of A. The set
difference {1, 2, 3} \ {2, 3, 4} is {1} , while, conversely, the set difference {2, 3, 4} \ {1, 2, 3} is {4}. When A is a
subset of B, the set difference B \ A is also called the complement of A in B. In this case, if the choice of B is clear
from the context, the notation 𝐴𝑐 is sometimes used instead of U \A, particularly if B is a universal set as in the
study of Venn diagrams.

 Symmetric difference of sets A and B is the set of all objects that are a member of exactly one of A and B
(elements which are in one of the sets, but not in both). For instance, for the sets {1,2,3} and {2,3,4} , the
symmetric difference set is {1,4}. It is the set difference of the union and the intersection, (A ∪ B) \ (A ∩ B).

Anuj Pratap Singh Trinity College Dublin

 Convexity

 A set is convex if for every pair of points within the

object, every point on the straight line segment that

joins them is also within the object.

Anuj Pratap Singh Trinity College Dublin

 Openness, Boundedness and Compactness

A set O is called an open subset of M or just open, if for any x ∈ O there is some open
ball S with radius r > 0 around x such that S ⊂ O. A set O is called closed if its
complement M \ O is open. Expressed differently, a set O - which is a subset of M - is
open if and only if it does not contain its boundary points.

A set is called bounded, if it is of finite size.

 Closed, not bounded: the interval [0,∞) ⊂R

 Not closed, bounded: the interval (0, 1) ⊂R

 Closed, bounded: the interval [2, 3] ⊂R

 Not closed, not bounded: the interval (1,∞) ⊂R

In Euclidean space, a compact set is closed and bounded.

Anuj Pratap Singh Trinity College Dublin

 Interior and Set Boundaries

The interior of a set S is the set of all interior points of S.

The interior of S is denoted int(S), Int(S), or So.
 int(S) is an open subset of S.

 int(S) is the union of all open sets contained in S.

 int(S) is the largest open set contained in S.

The boundary of a set is closed.

 More precisely, it is the set of points in the closure of S,
not belonging to the interior of S.

Anuj Pratap Singh Trinity College Dublin