Calculus in Economics - Project Introduction

The purpose of this project is for students to see the real power of calculus to describe and explain the world around them. With the U.S. and world economy all over the news, we decided to compile a group of activities that show students how calculus is used in the study of economics. The components of the project are independent of each other, so teachers can use some or all of them, depending on the background of their students and the amount of time they would like to commit to the project. We generally try to give at least two weeks for projects like this one. Student material and teacher material, most with solutions, are provided so teachers can see what content is involved in each section.

• The Baseball Card Problem - In this real-world optimization problem, students find the time at which they should sell a baseball card in order to maximize its value. By using parameters for important quantities in their models, students are then able to see the effect of each parameter on the final answer.
  • Student Handout for the Baseball Card Problem
  • Teacher Handout for the Baseball Card Problem
• The Marginal Value Theorem - In this component we venture into the world of environmental economics. The longer a bee forages for pollen in a flower patch, the more difficult it becomes to find food, but finding a new patch of flowers takes time and energy. In this activity students use calculus to determine the amount of time a bee should remain in a give flower patch before moving on to a new food source.
  • Student Handout for the Marginal Value Theorem
  • Teacher Handout for the Marginal Value Theorem
• Elasticity of Demand - Elasticity of demand is a measure used in economics to show the way that the quantity demanded of a good or service responds to a change in its price. In this activity, students learn about this measure and apply it to real-world situations.
  • Student Handout for Elasticity of Demand
  • Teacher Handout for Elasticity of Demand
• Gini Index - The Gini index is a measure of inequity. It is most often applied to income, but can also measure inequity in a variety of goods and services, including education, health care, and food accessibility. In this component of the project, students discover how to calculate the Gini index, an interesting application of the area between curves, then have the opportunity to explore how this measure varies between countries or has changed over time.
  • Student Handout for Gini Index
  • Teacher Handout for Gini Index

If you choose to have your students work through this investigation and find errors or have questions, please e-mail one of us at: "belledin at ncssm dot edu" or "teague at ncssm dot edu." One of us (or our colleagues) will get back to you with support.

Note: Teacher handouts are password-protected. Please feel free to email one of us in the NCSSM math dept to receive the login credentials.