t~
r.~
~~
20 Part One lntrod11ction ~
-~
I
2.5 Types of Function
The expression y = f (x) is a general statement to the effect that a mapping is possible, but
the actual rule of mapping is not thereby made explicit. Now let us consider seve~al specific
types of function, each representing a diff~r~nt rule of mapping. v
1•
Constant Functions ' .
A function whose range consists of only one element is called a constcmtfimction. As an , ti
example, we cite the function
y=f(x)=7
which is .alternatively expressible as y =7 or f(x) =7, whose value stnys the same
regardless of the value of x. In the coordinate plane, such a function \~ill appear as a hori-
, zontal straight line. In national-income models, when investment/ is exogenously deter-
-
~
mined, we may have an investment function of the form I =$l00 million, or I = 10, which
exemplifies the constant function. ~
Polynomial Functions ~
~
tI
The constant function is actually a "degenerate,, case of what ·are known as polynomial ~
functions. The word polynomial means "multite~," and a polynomial function of a single ~
t
~
~
variable x has the general form tI.
( ◄
~
(2.4) t-
t'
l.
in whicl1'-each term contains a. coefficient as well as a nonnegative-integer power of the
t
·, ~
variable x. (As will be explai~~d later in this section, we can write x =x and x = l in
1 0
senernl; thus the first two terms may.be taken to be a0x0 and a1x 1, respectively.) Note that, ,·
•
instead of the symbols a, b, c, ... , we have employed the subscripted symbols ao,
ah ... , a11 for the coeffici~nts. This is motivated by two considerations: (1) we can econo·
.mize on symbols, sinc·e only the letter a is "used up" in this way; an.cl(~) the subscript helps
to pinpoiµt the location of a particular coeffici~nt in the entire equation. For instance, in
(2.4), a2 is the coefficient of x1, and so forth.
20
~
~
r~: r
t'
~:
~- Depending on the voluc of th~ i~11cgcr 11_ (whi.ch
Cht1pter 2 Economic Models 21
.~ I highest power of x), we
spcc111es t tc
rr~ have scvcrnl subclnsscs of po\ynomrnl funct101':
I
Cri~e of 11 == 0: y: Cl() (constant function)
Case of n = I: y =a0 +a 1x (linear function)
(. ,::ise of n == 2: .y = ao + n,x
+ a2.x 2 [quadratic function)
~
I
;
•
Case of 11 = 3: y =no + a1x + a2x2 + a3x 3 [cubic function}
~ and so forth. The superscript indicators of the
powers of x are called exponents. The high-
est power involved, i.e., the value of 11, is often calle
{)· tion; a quadratic function, for instance, is a second-d
d the degree of the polynomial func-
~- egree polynomial, and a cubic function
is a third-degree polynomial.t The order in which
~. the equals sign is inconsequential; they may be arran
the several terms appear to the right of
ged in descending order of power in-
stead. Also, even though we have put the symbol yon
the left, it is also accep~able to write
~
~;
f (x) in its pl.ace1
~
(J'
--
-- When plotted~in the coordinate plane, a linear funct
ion will appear as a straight line, as
C
~ -
-.,
i11ustrated in Fig. 2.8a. When x = 0, th'e linear func
(0, ao) is on the line. This gives us the so-calledy
tion yields y ~ ao; thus the ordered pair
intercept (or vertical intercept), because
~
~
.__
:t
tr (\j
it is at this point that the vertical axis intersects the
the slope (the steepness of inc.line) of our line. This
sult in an increment iny in the amount of a. . What
1
line. The other coefficient, a1, measures
means that a unit increase in x will re-
Fig. 2.8a illustrates is the case of a1 > 0,
involving a positive slope and thus an upward-s
loping line~ if a1 < 0, the 1ine will be
downward-sloping.
~ A quadratic function, on the other hand, plots as
a parabola-roughly, a curve with a
single built-in bump or wiggle. The particular illust
~ in the case of a2 > 0, the curve will "open" the othe
ration in Fig. 2.8b implies a negative a ~
2
r way, displaying a valley rather than a
hill. The graph of a cubic function will, in general,
manifest two \yiggles, as illustrated in
~ Fig. 2.8c. These functions will be used quite frequ
ently in the economic models subse-
quently discussed.
~
Rational Functions
~ A function such as
x~ l
@. y-
,- x2 +2x +4
I
in which y is expressed as a ratio of two polynom
; ials in the variable x, is knm,~n as a ratio-
nal function. According to this definition, any polynom
ial function must itself be a rational
function, because it can always be expressed as
a ratio to 1, and 1 is a constant function.
~I
A special rational function that has interesting appl
ications in economics is the function
l'
I a
y ."'-:
~ X
or xy = o
which plots as a rectangular hyperbol~, as in Fig. 2.8c/
. Since the product of the two vari-
ables is always a fixed _constant in this case, this
function may be used to represent that
special demand curve-with price P and quantity
Q on the two axes-for which• the total
t In the several equations just cited,
the last coefficient (0 ) is always assumed co
otherwise the function would degenerate into 11 be nonzero;
a lower-degree polynomial.
21
' 22 Part One J,rm.lwh('>t
FIGURE.2.8 -"l l inrrn
,-no-111,,
y
) - a0
Quadratic
~ a 1 \' f- th t '
X 0
(ol (b)
I y y Rectangular-hyperbolic
(I
y=x
ao
X
0 X 0
(c) (cl)
/
y Exponential y Logarithmic
,, = bx y = logb .\'
/
/
0 r 0 X
(e)
/
(!)
fr
I
I
'
/
expenditure PQ is constant at all levels-of price. (Such a demand curve is the one with a
unitary elasticity at each point on the curve.) Another application is to the average fixed
cost (AFC) curve. With AFC on one axis and output Qon the other, the AFC curve must be
rectangulat-hyperbolic because AFC x Q( =total fixed cost) is a fixed constant. ,.I
'
??
Chapter 2 Economic Model3 23
The rectangular hyperbola drawn from xy = a never meets the
axes, even if extended
curve approa ches the axes asymplolically:
indefinitely upwArd ond to the right. Rother, the
ever closer to they axis but never actually
as y becomes very large, the curve will come
tute the asymp totes of t'his function.
rc~ch it, and similarly for the x axis. ·111e ~xes consti
Nonalgebraic Functlot1s
(such as square root) of
. Any function expressed in terms of polynomials and/or roots
functions discussed thus far are a\\
polynomials is an algebraic function. Accordingly, the
algebraic.
ndent variable av-
However, expo~~e~1tial functions s_uch as y = bx, in which the indepe
functions, such as
pears in the exponent, are nonalgebraic. The closely related logarithmic
n have a specia l role to play in
y = logb .\\ are also nonalgebraic. These two types of functio
ble to postl)One their
certain types of economic applications, and it is pedagogically desira
ic shapes in Fig. 2.8e
discussion to Chap. 10. Here, we simply preview their general graph
(OT circular) functions,
and f Other types of nonalgebraic function are the trigonometric
Jvhich we shall discuss in Chap. 16 in connection with dynam
ic analysis. We should add
11ere that nonalgebraic functions are also known by the more
esoteric name of transcen-
dental functions.
A Digression on Exponents
ents as indicators of the
In discussing polynomial functions, we introduced the tern1 expon
62 means that 6 is to
power to which a variable (or number) is to be raised. The expression 2
.or 6 = 6 x 6 = 36. ln
be raised to the second power; that is, 6 is· to be 1nultiplied by itself,
general, \1/e define, for a positive i~te$er n,
, n
x =xx xx•· ··Xx
11 _tem1s
it follows that for
and as a special case, we note that x = x. Fro1n the general definition,
1
positive integers ni and_ n, exponents obey the following rules:
(for exan1pie, x x x =x )
3 4 7
.xm x x == xm+n
11
Rule I
PROOF
x 111 x x11 == ( x x x x • • • x x ) ( x x x x • • • x x )
m terms n terms
. .111+11
=XX XX• " X X=~t
+
m n terms
~r x, ~r to the
Note that in this proof, we did not assign any specific value to th~1 nu1nbth1 thbat
and n. Thus the result obtained is gener ally true. It s_ for, s reason
exponents •m
• t e· ificatton •fhe same can e
• f
the demonstration given constitutes aproo , as aga1ns a mere v r
said about the proof of Rule II which follows. 4
X
m
m-n (xi= 0) for exan1ple, xx3 == x)
-=X (
Rule II xn
m terms
m-11
, X v
xm •_,·xx
X •••- -
-\- - -
"' :::: X X X X ••• ·x X :=: .,"
- - xxx x•·· XX terms
PROOF x" 111 - 11
11 lt!l'lllS
