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Lecture Notes for Mathematical Methods for Economics I......................................................................................1

Chapter 2: Sets..............................................................................................................................................................1
2.1 Sets Containing Elements.....................................................................................................................................1
2.2 Sets in Words, Tabular Form and Algebraic Form................................................................................................1
2.3 Set Equality...........................................................................................................................................................2
2.4 Finite (Infinite) Sets and Counting Principle........................................................................................................3
2.5 Subsets of a Set.....................................................................................................................................................4
2.6 Complements of Sets............................................................................................................................................5
2.7 Universal Set.........................................................................................................................................................5
2.8 Intersection and Union of Sets..............................................................................................................................6
2.9 Venn Diagrams......................................................................................................................................................6
2.10 Arguments and Venn Diagrams...........................................................................................................................7
2.11 Operations with Sets...........................................................................................................................................9

Lecture Notes for Mathematical Methods for Economics I

Prepared by M. Franklin and R. Hosein1
Chapter 2: Sets
Sets refer to any collection of objects e.g. the set of all TVs produced by a company or the set of
all numbers between 0 and 1.
2.1 Sets Containing Elements
Let B represent a basket of commodities purchased by a housewife with, amongst other things, 1
carrot (ca) and 1 onion (on). ca and on are called elements of B. For our housewifes basket of
commodities, we may write:
ca B which reads carrot is an element of set B.
on B which reads onion is an element of set B.
where means is an element of or belongs to.
2.2 Sets in Words, Tabular Form and Algebraic Form
In terms of our discussion on sets of numbers, we may now define some sets in words:
R: set of real numbers
1

We would like to acknowledge the research assistance of M. Maharaj.

Q: the set of rational numbers

I: the set of integers
N: the set of natural numbers
In general, uppercase letters denote sets and lower case letters denote elements of sets. A welldefined set is one in which it is easy to identify all the elements.
Sets can also be represented in the form of a list as shown below:
N = {1, 2, 3, 4, } is the set of all natural numbers
Y = {1, 3, 5, 7, } the set of all odd natural numbers
Sets can also be defined algebraically:
N = {x: x N} all natural numbers
E = {x: x N, x is even} all even natural numbers
O = {x: x N, x is odd} all odd natural numbers
2.3 Set Equality
Two sets A and B are equal if they contain the same elements, and is written A = B. If they do not
contain the same elements, then they are unequal and are represented by A B.
Example 2.1
If
A= {cassava, yam, eddoes}
B= {yam, cassava, eddoes}
then A = B
i.e. the ordering of the elements in a set does not matter for set equality.
Note, however, that if we define B as = {yam, cassava, eddoes, dasheen}, then B A.

Note also that if B = {yam, cassava, eddoes, yam, eddoes}, then A=B still holds.
This reveals that a set is not changed by repeating one or more of its elements.
2.4 Finite (Infinite) Sets and Counting Principle
A set is said to be finite if it has n distinct elements, where n is a positive integer. Otherwise, the
set is called an infinite set.
For a finite set A, the number of elements can be represented by n(A)
Example 2.2
Which of the following sets are finite?
(a) A = {Brian Laras test scores}
(b) B = {counties in Trinidad and Tobago}
(c) C = {even natural numbers less than 1}
(d) D = {even numbers}
(e) F = {odd numbers}
Solution
(a) The set of Brian Lara test scores is finite.
(b) The number of counties in T & T is a finite set.
(c) The number of even natural numbers less than 1 is 0, i.e. n(C) = 0, so the set is finite.
(d) The number of even numbers is an infinite set because the elements are not countable.
(e) The number of odd numbers is also an infinite set for the same reason.
Example 2.3
Determine the number of elements in the following finite sets:
(a) A = {4,6,8,10,12}
(b) B = {x: x 2= 9}
(c) C = {x: x > x + 2}
(d) D = {x: x is a positive integer, x is a divisor of 12}
(e) E = {letters in the alphabet}

Solution
(a) n(A) = 5
(b) n(B) = 2 since B = {+3, -3}
(c) n(C) = 0, as no x which has such a characteristic exists
(d) The divisors of 12 are, 1, 12, 3, 4, 2, 6.

n(d) = 6

(e) n(E) = 26
2.5 Subsets of a Set
Let

X = {yam, cassava, dasheen, eddoes}

Y = {yam}
C = {cassava}
D = {dasheen}
E = {eddoes}

Then the sets Y, C, D, E, are contained in X and are called subsets of X. So too will sets
comprising two or more elements of X.
Since Y X, it is called a proper subset and is written Y X or X Y (read Y is contained in X
or X contains Y). If we have a new set T and we do not specify whether T = or T = X, but we
know T is a subset of X, then we can write:
T X or X T, which reads T is a subset of X or X contains T.
Note that all sets have itself and (the empty set) as subsets. For any set X we refer to a set W,
which has the same elements as X, as being improper i.e. W is not a proper subset of X.
2.6 Complements of Sets
For

X = {cassava, yam, dasheen, eddoes}

and
Y = {yam}
we observe that there are elements in X that are not in Y. These elements are represented as
follows.
{x: x X, x Y}
These elements form a subset of the set X. Let us call this subset Y' (read Y prime). The set Y' is
the complement of the set Y in X.
The empty set, , is a subset of every set S such that:
S .
Thus, the subsets of the set S = {a, b, c, d} are:
, {a}, {b}, {c}, {d}, {a, b}, {a, c}, {a, d}, {b, c}, {b, d}, {a, b, c}, {a, b, d}, {b, c, d}, {a, b, c,
d,}, {b, c, a}, {c, a, d}
In general we can determine the number of subsets of a set X with n elements by the formula 2n.
Thus, a set with 3 elements has 8 subsets. One with 4 elements has 16 subsets, and so on.
Proper subsets exclude . Thus, every set has 2n subsets; 2n-1 proper subsets and the empty set,
where n is the number of elements in the set.
2.7 Universal Set
Subsets are derived from a master set. This master set is alternatively called the Universal set
U.
2.8 Intersection and Union of Sets

The intersection of two sets X and Y (X Y) refers to the set of all elements that belong to both
X and Y.
X Y = {a: a X and a Y}
Thus if X = {cassava, yam, eddoes, dasheen}
And

Y = {yam, green fig}

then

X Y = {yam}

where is read intersection and X Y is the intersection of X and Y.

The union of X and Y is the set of all elements contained in X or Y. It is represented by X Y
(read as X union Y). In our example:
X Y= {a: aX or aY)
X Y = {cassava, yam, eddoes, dasheen, green fig)
X and Y will be called disjoint if they have no elements in common, that is, if X Y= , the
empty set.
2.9 Venn Diagrams
It is possible to denote complements, intersection and the union of sets by means of Venn
diagrams. These diagrams are also called logic diagrams and derived their name from a Scottish
Mathematician in the 19th century.
In the Venn diagrams below, the universal set (U) is represented by the area within a rectangle,
while the areas within the circles represent non-empty subsets of the Universal set. For
convenience, we shall assume that for non-empty sets, none of its elements fall on the boundary
of the circle. In fig 1, the subsets X and Y of U satisfy X Y (read X is a subset of Y). In fig 2,
X Y = (read X intersect Y is equal to the empty set) and in fig 3, X Y (read X intersect
Y is not equal to the empty set).
U

Y
X

Y
Fig. 1

Fig. 2

Fig. 3

If we shade X and Y as shown in fig. 4, then the shaded area represents X Y (read X union Y).
The shaded area in fig. 5 represents X Y (read X intersects Y). In fig 4 (X Y)' is the same as
the un-shaded area within the Universal set.
U

Fig. 4

Y
Fig. 5

Note that whilst any theorem or property can be illustrated with Venn diagrams, no theorem can
be proved by the use of one.
2.10 Arguments and Venn Diagrams
In this section, Venn diagrams are employed to determine the validity of arguments.
Consider the example
S1: Calypsonians are happy people
S2: Politicians are rich
S3: People who are happy are not rich
Determine the validity of each of the following:
(i)

No calypsonian is rich

(ii)

Politicians are happy

(iii)

Someone cannot be a calypsonian and an politician

By S1 the set of calypsonians is contained in the set of happy people and by S3 the set of happy
people is disjoint from the set of rich people.

Calypsonian
s

Rich people

Happy people

By S2 the set of politicians is contained in the set of rich people. From the Venn diagrams below,
arguments (i) and (iii) are valid conclusions whilst (ii) is not.

Calypsonian
s
Happy people

Politicians
Rich people

Venn diagrams can be used to test the validity of any argument.

Example 2.4
Determine the validity of the following sets of arguments:
(a) 1. West Indians like to bat
2. Some batsmen like to bowl
Therefore some West Indians like to bowl.
(b) 1. If I were a fast bowler, then I would have bowled a bouncer.
2. I did not bowl a bouncer
Therefore I am not a fast bowler.
Solution
(a) There are different possible Venn diagrams.

People who
like to
bat
West
Indians
who

West
Indians
like to bat and
bowl

All people

People
who
like to

bowl

(b)
Non Bouncers
Bouncers
Fast
Bowlers

All bowlers

2.11 Operations with Sets

In addition to complementarity, union and intersection, there are other operations that can be
performed with sets. This section comments on some of these. The difference A-B, in that order,
of two sets A and B, is the set of all elements in A that do not belong to B i.e.
A-B = {x: x A, x B}
A-B = if and only if A B.
A-B = A if and only if A B =
The following is a list of laws concerning operation with sets. They are stated without proof.2
Laws of Operation with Sets
2

For proofs, see a more specialist text on discrete mathematics.

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1. (A`)` = A
2a. ` = U

2b. U` =

3. A A = , A - = A, A B = A B`
4a. A = A

4b. A U = A

5a. A U = U

5b. A =

6a. A A = A

6b. A A = A

7a. A A` = U
Associative Laws

7b. A A` =

8a. (AB)C =A (B C)
Commutative Laws

8b. (A B) C = A (BC)

9a. A B = B A
Distributive Laws

9b. A B = B A

10a. A(BC)=(AB)(AC)
De Morgans Laws

10b. A (BC) = (AB)(AC)

11a. (A B) ` = A` B`

11b. (A B)` = A` B`

12a. A (B C) = (AB) (AC) 12b. A(BC) = (AB) (A-C)

Prove De Morgans Laws: (a) (A B)`= A` B`, and (b) (A B)` = A` B`
(a) Two equivalent methods are used to prove the set equation. The first method uses the fact that
X = Y is equivalent to X Y and Y X. The second method uses Venn diagrams.
Method 1: We first show that (A B)` A` B`. If x (A B)`, then x A B. Thus x A
and x B, and so x A` and x B`. Hence x A` B`. Next we show that A` B` (A B)`.
Let x A` B`. Then x A` and x B`, so x A and x B. Hence x A B, so x (A B)`.
We have proven that every element of (A B)` belongs to A` B` and that every element of
A`B` belongs to (A B)`. Together, these inclusions prove that the sets have the same
elements, i.e. that (A B)` = A` B`.
Method 2: The two Venn diagrams below show that (A B)`= A` B` since the same areas are
shaded.

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(A B)` is shaded

A` B` is shaded

(b) First shade A`, the area outside of A, with strokes that slant upwards to the right (///) and
then shade B` with strokes that slant downwards to the right (\\\) as shown below. The total area
shaded will thus be A` B` and this is shown in the second diagram. Note that this total area is
outside of A B, i.e. it is (A B)`. Thus A` B` = A` B`

A` is shaded with ///

B` is shaded with \\\

A` B` is shaded

Prove the identity laws: (a) A = A, and (b) A U = A.

(a) A A . Suppose x A . Then x A or x . Since is the empty set, x and
hence x A. Thus A A. Both inclusions give A = .

12

(b) A U A. Suppose x A. Since U is the universal set, x U; and hence x A U. Thus A

A U. Both inclusions give A U = A.

Prove the identity laws: (a) A U= U, and (b) A = .
(a) U A U. Since U is the universal set, A U U. Both inclusions imply A U= U.
(b) A . Since is the empty set, A . Both inclusions imply A = .
Prove the Distributive Laws: (a) A (B C) = (A B) (A C), and (b) A (B C) = (A
B) (A C).
(a) By the Venn diagrams below, A (B C) and (A B) (A C) represent the same area.
Thus A (B C) = (A B) (A C).

B
C

A (B C) is shaded

(A B) (A C) is shaded

(b) By the Venn diagrams below, A (B C) and (A B) (A C) represent the same area.
Thus A (B C) = (A B) (A C).

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A (B C) is shaded

(A B) (A C) is shaded

Prove the Commutative Laws: (a) A B = B A, and (b) A B = B A.

(a) A B = {x: x A or x B} = {x: x B or x A} = B A.
(b) A B = {x: x A or x B} = {x: x B or x A} = B A.
Prove the Idempotent laws: (a) A A = A, and (b) A A = A.
(a) A A = {x: x A or x A} = {x: x A} = A.
(b) A A = {x: x A and x A} = {x: x A} = A.
Notation for the 3-set problem
The notation for the 3-set problem follows exactly the same lines as that for the 2-set problem.
Here of course there is one extra attribute present, necessitating a Venn diagram involving three
intersecting sets having 8 distinct areas. Labeling the 3 sets in question A, B and C, the standard
Venn diagram is shown below,
where:
a = the number of elements in set A alone (i.e. not in B or C).
ab

= the number of elements in just A and B (i.e. not in C).

abc

= the number of elements in A and B and C and so on.

= the number of elements in neither A nor B nor C.

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Universal Set
A

B
ab

abc
ac

bc

c
$

Also: n[A] = a + ab + ac + abc

(the sum of all the areas containing an a)

n[B] = b + ab + bc + abc

(the sum of all the areas containing a b)

n[C] = c + ac + bc + abc

(the sum of all the areas containing a c)

n[A B] = a + b + ac + bc + ab + abc

(this can be seen from the diagram)

= (a + ab + ac + abc) + (b + ab + bc + abc) ab abc

=

n[A]

- n[A B]

n[B]

Similarly for n[A C] and n[B C]

n[A B C] = a + b + c + ab + ac + bc + abc
= (a + ab + ac + abc)+(b + ab + bc + abc)+(c + ac + bc + abc)(ab+abc)(ac+abc)(bc+abc)+ abc
=

n[A]

n[B]

n[C]

n[AB] n[AC]n[BC]+n[ABC]

Example 2.5
There are currently three daily newspapers in the island of Trinidad: Newsday (N), Express (E)
and Guardian (G). In a recent poll of 120 people, it was found that
(i)

50 people read Newsday

(ii)

52 read Express

(iii)

52 read Guardian

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(iv)

18 read both Newsday and Guardian

(v)

22 read both Newsday and Express

(vi)

16 read both Express and Guardian and

(vii)

16 read no newspaper at all

(a) How many people read Newsday, Express and Guardian?

(b) How many people read exactly one of the three dailies?
Solution
(a) Let x = n(NEG) be the number of people who read all three newspapers. Note
n(NEG) = 104 because 16 people read none of the newspapers. We have:
n(N E G ) = n(N) + n(E) + n(G) n( N E ) n( N G ) n(E G) + n(N E G )
Hence, 104 = 50 + 52 + 52 22 18 16 + x
x=6
6 people read the Newsday, Express and the Guardian.
The required Venn diagram, Fig. (b) below, is obtained as follows:
6 read all three magazines
22 6 = 16 read Newsday and Express but not all three magazines,
18 6 = 12 read Newsday and Guardian but not all three magazines,
16 6 = 10 read Express and Guardian but not all three magazines,
50 16 12 6 = 16 read only Newsday,
52 16 10 6 = 20 read only Express,
52 12 10 6 = 24 read only Guardian.

16

16
6

16

20
10

20

12G

24

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Fig. (a)

Fig. (b)

(b) 16 + 20 + 24 = 60 read only one magazine.

Theorem 2.5
Suppose A and B are finite sets. Then A B and A B are finite and
n(A B) = n(A) + n(B) n(A B)
Thus n(A B) = n(A) + n(B) n(A B)
Theorem 2.6
Suppose A, B and C are finite sets. Then A B C is finite and
n(A B C) = n(A) + n(B) + n(C) n(A B) n(A C) n(B C) + n(A B C)
Proof: Using (A B) C = (A C) (B C) and (A C) (B C) = A B C and using
theorem 2.5 repeatedly, we have:
n(A B C) = n(A B) + n(C) n[(A C) (B C)]
= [n(A) + n(B) n(A B)] + n(C) [n(A C) + n(B C) n(A B C)]
= n(A) + n(B) + n(C) n(A B) n(A C) n(B C) + n(A B C)