Of course.

Here is a detailed structure for learning and preparing for the calculus portion of
an examination like the ISI MSQE, along with book recommendations and a guide on how to
approach your learning.

The A-to-Z Guide for Mastering Calculus for Quantitative Economics

This comprehensive guide will walk you through a structured learning path for the essential
calculus topics required for the ISI MSQE and similar quantitative entrance exams. It covers
the what, why, and how of your calculus preparation.

Recommended Textbook

For a course of study with a clear aim toward economic applications, a single, comprehensive
textbook is highly recommended to ensure consistency in notation and approach.

Primary Recommendation:
●​ "Mathematics for Economic Analysis" by Knut Sydsæter and Peter J. Hammond.
○​ Why this book? This is the quintessential textbook for students of economics. It is
written with the specific intention of teaching mathematical concepts to those who
will apply them to economic theory. The examples are often couched in economic
contexts (utility maximization, cost minimization, etc.), which will be invaluable for
your preparation. It covers nearly all the topics listed in your syllabus in sufficient
depth.

Alternative Recommendation:
●​ "Fundamental Methods of Mathematical Economics" by Alpha C. Chiang and Kevin
Wainwright.
○​ Why this book? Another classic, this book is also excellent at bridging the gap
between pure mathematics and economic applications. Some find its explanations
more gradual and easier to follow than Sydsæter and Hammond.

You can choose either of these books as your primary text. For the purpose of this guide, we
will assume you are using Sydsæter and Hammond, but the structure remains the same
regardless of your choice.
The Learning Structure: A Topic-by-Topic Progression

Here is a logical sequence for mastering the required calculus topics. Each step builds upon
the previous one, so it is crucial to follow them in order.

Part 1: The Foundation - Functions of a Single Variable

This initial phase ensures you have a rock-solid understanding of the basics before moving to
more complex topics.

Topic 1: Functions
●​ What to Learn:
○​ Definition of a function, domain, and range.
○​ Types of functions: linear, polynomial, rational, exponential, and logarithmic.
○​ Graphing these functions and understanding their properties.
○​ Composition of functions.
●​ Why it's Important: Functions are the fundamental building blocks of mathematical
modeling in economics. You'll use them to represent utility, production, cost, demand,
and more.
●​ Learning Approach: This should be a review for most. Skim the initial chapters of your
textbook to ensure you are comfortable with all the concepts. Pay special attention to
exponential and logarithmic functions, as they appear frequently in economic growth and
finance models.

Topic 2: Limits and Continuity

●​ What to Learn:
○​ The intuitive concept of a limit.
○​ Formal definition of a limit (ϵ−δ definition is good to see, but deep mastery isn't
essential for MSQE).
○​ Properties of limits.
○​ One-sided limits.
○​ The concept of continuity and its graphical interpretation (no breaks or jumps).
○​ The Intermediate Value Theorem.
●​ Why it's Important: Limits are the theoretical underpinning of differentiation and
integration. Continuity is a crucial assumption in many economic models, ensuring that
small changes in an input lead to small changes in the output.
●​ Learning Approach: Focus on the intuition. Use graphical tools like Desmos to visualize
how a function approaches a limit. The exercises in your textbook are key to solidifying
your understanding.

Topic 3: Differentiation of Functions of One Variable

 ●​ What to Learn:
○​ The derivative as the slope of a tangent line and as a rate of change.
○​ Rules of differentiation: power rule, product rule, quotient rule, and chain rule.
○​ Higher-order derivatives.
○​ Applications: finding marginal cost/revenue/utility, elasticity.
●​ Why it's Important: This is one of the most powerful tools in economics. It allows you to
analyze marginal changes, which are at the heart of decision-making for consumers and
firms.
●​ Learning Approach: Memorize the differentiation rules and practice, practice, practice.
Do every type of problem you can find in your textbook until these rules become second
nature.

Topic 4: Unconstrained Optimization (Single Variable)

●​ What to Learn:
○​ Finding critical points (where the first derivative is zero or undefined).
○​ The first and second derivative tests for identifying local maxima and minima.
○​ Identifying global maxima and minima on a given interval.
●​ Why it's Important: This is the mathematical framework for profit maximization and cost
minimization problems in their simplest form.
●​ Learning Approach: This is a direct application of differentiation. Work through the
examples in your textbook, paying close attention to the economic interpretations.

Topic 5: Integration
●​ What to Learn:
○​ Indefinite integrals as anti-derivatives.
○​ Rules of integration.
○​ Key Techniques: Integration by substitution and integration by parts.
○​ Definite integrals as the area under a curve.
○​ The Fundamental Theorem of Calculus.
○​ Applications: calculating total cost from marginal cost, finding consumer and
producer surplus.
●​ Why it's Important: Integration allows you to move from a marginal concept (like
marginal cost) to a total concept (like total cost). It is also essential for welfare analysis
(consumer and producer surplus).
●​ Learning Approach: Integration is often considered more challenging than
differentiation. Spend ample time on substitution and by parts, as these are the most
common techniques you'll need.

Part 2: Advancing to Higher Dimensions

Now you will extend the foundational concepts to functions of multiple variables, which is
where the most interesting economic applications lie.

Topic 6: Differentiation of Functions of More Than One Variable

●​ What to Learn:
○​ Functions of two or more variables.
○​ Partial derivatives and their interpretation.
○​ The total differential and its use in comparative statics.
○​ Higher-order partial derivatives (including Young's Theorem).
●​ Why it's Important: Economic relationships rarely involve just one variable. Utility is a
function of multiple goods, and production is a function of multiple inputs. Partial
derivatives allow you to analyze the effect of changing one variable while holding others
constant (the ceteris paribus assumption).
●​ Learning Approach: The concept of a partial derivative is a natural extension of the
single-variable derivative. The key is to treat all other variables as constants.

Topic 7: Homogeneous and Homothetic Functions

●​ What to Learn:
○​ Definition of a homogeneous function and its degree.
○​ Euler's Theorem for homogeneous functions.
○​ Properties of homogeneous functions, especially in the context of production
functions (returns to scale).
○​ The definition of a homothetic function and its relationship to homogeneous
functions (a monotonic transformation of a homogeneous function).
●​ Why it's Important: These concepts are fundamental to production theory (returns to
scale) and consumer theory (the shape of indifference curves).
●​ Learning Approach: These topics are more abstract. Focus on understanding the
definitions and their economic implications. Sydsæter and Hammond have an excellent
chapter on this.

Topic 8: Convexity and Quasi-convexity

●​ What to Learn:
○​ Definitions of convex and concave functions.
○​ How to check for convexity/concavity using second derivatives (Hessian matrix for
multiple variables).
○​ Definitions of quasi-convexity and quasi-concavity.
○​ The relationship between these concepts (a convex function is always quasi-convex).
○​ The economic significance: diminishing marginal utility (concave utility function),
diminishing marginal returns (concave production function), and convex preferences.
●​ Why it's Important: These properties are crucial for ensuring that the solutions to
optimization problems are well-behaved and represent a maximum (or minimum) as
desired. For example, a concave utility function ensures that the second-order conditions
for utility maximization are met.
 ●​ Learning Approach: This is another highly conceptual topic. Link the mathematical
definitions to their graphical representations and economic interpretations.

Part 3: The Pinnacle - Optimization with Constraints

This is the culmination of your calculus training and is the most frequently tested advanced
topic.

Topic 9: Constrained Optimization

●​ What to Learn:
○​ The Lagrange multiplier method for equality constraints.
○​ Interpretation of the Lagrange multiplier (the shadow price).
○​ First and second-order conditions for constrained optimization.
○​ Solving problems with not more than two variables.
●​ Why it's Important: This is the workhorse of microeconomic theory. Utility maximization
is constrained by a budget. Cost minimization is constrained by a required output level.
Almost all interesting economic problems involve optimizing subject to constraints.
●​ Learning Approach: This is a "must-master" topic. Work through every single example
and problem in your textbook. Understand the "recipe" of setting up the Lagrangian,
finding the first-order conditions, and solving the resulting system of equations.

Topic 10: Implicit Function Theorem

●​ What to Learn:
○​ The statement of the theorem (you don't need to prove it, but you must understand
what it says).
○​ Its primary application: comparative statics. How does the optimal choice of a
variable change when a parameter of the model changes?
●​ Why it's Important: This theorem provides the theoretical justification for comparative
statics exercises. For instance, how does a consumer's demand for a good change when
its price changes? The Implicit Function Theorem allows us to find this derivative.
●​ Learning Approach: This is arguably the most abstract topic. Focus on its application.
Sydsæter and Hammond demonstrate its use clearly in the context of comparative
statics.

Textbook vs. Lectures: The Optimal Learning Strategy

Your question about whether to rely on a book directly or use it as a reference after lectures is
excellent. The best approach is a hybrid one:
1.​ Before the Lecture (if applicable): Pre-read the relevant chapter. Don't aim for deep
understanding at this stage. Your goal is to get a general idea of the concepts,
 definitions, and the types of problems you will encounter. This "primes" your brain for the
lecture.
2.​ During the Lecture: Active Listening. Since you have pre-read the material, the lecture
will not be the first time you are hearing these terms. You can now focus on the lecturer's
explanations, their emphasis on certain topics, and the nuances they provide. Take
detailed notes.
3.​ After the Lecture: Deep Dive with the Textbook. This is the most crucial step. Reread
the same chapter, but this time, read it carefully. Work through the examples
step-by-step. Your goal is to solidify your conceptual understanding.
4.​ Problem Solving: Now, tackle the end-of-chapter problems in your textbook. Start with
the easier ones and gradually move to the more challenging ones. Do not skip this step.
This is where true learning happens.
5.​ Review and Consolidate: At the end of each week, quickly review the topics you have
covered. This will help in moving the information from your short-term to your long-term
memory.

If you are self-studying without lectures, the textbook becomes your primary teacher. In this
case, you must be even more disciplined in your reading and problem-solving. Consider
supplementing your learning with online resources like Khan Academy or video lectures from
universities like MIT OpenCourseWare for difficult topics.

By following this structured approach, you will not only cover all the necessary topics but also
build a deep, intuitive understanding of how calculus is applied in economics, which is exactly
what the ISI MSQE exam is designed to test.