Basic Set Theory

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Mathematics for Economists
Basic Set Theory

Introduction to Sets
Set theory is an important topic in mathematics and applied economics. Sets are much more
extensively used than people think. In applied economics we often work with sets of objects
or data points which are contained within a set of possible values. Essentially a set is a
collection of objects. These objects are known as elements. The idea of sets is broad and as
such a set can be made up of almost anything conceivable. For instance it could be a set of
numbers, books, alphabetical letters, individuals, firms, households, cars, Elvis Presley or
students. An element is an individual member of the set. For example let set contain three
elements 1,2 and 3. We can write the set A formally as = {1,2,3}. Additionally we can
write 2 as an element of A as, 2 . If an element does not belong to a set we use the sign
. There we can write 3 which means that 3 is not an element in the set .
Example 1: Thinking about sets in applied economics
In microeconomics we are often studying an income as a function of education, experience

and other factors. When we define income we know that it must be a positive number as no
one, for a given quantity of labour, can have a negative income. In other words it is
reasonable to assume that no one goes to work and pays their manager for the privilege of
providing their labour. Therefore we define income as a set : [0, +), where income has a
lower bound of 0 and an upper bound of positive infinity which although very unlikely, is
possible. In addition if labour is paid per hour and measured in hours per day spent at work,
the set of possible hours at work for a given day is the set : {0,1,2 ,24}. The minimum
hours in a day that someone can work is zero and the maximum labour input per day is 24
hours.
It is important to note that when we present sets the order in which we write the element is
inconsequential and does not matter. For instance if we want to show the set of integer
numbers we can denote the set in various ways. The set of integer number can be
expressed in set notation in many ways such as:
: {0,1, 1,2, 2,3, 3, } or, : { 3, 2, 1,0,1,2,3, } or, : { , 1,0,1, }
Sets of Sets: It is possible for elements of a set to be sets. For example the has three
elements of which one element {1,2,3} is actually a set.
= {, {1,2,3}, }
It is important to note that the set and, not the objects contained within the set, is an
element of . For instance {1,2,3} is an element , however the object 1 is not an element
.
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Finite Sets: If all the elements of a set can be listed then the set is called a finite set. The
sets A and B are examples of finite sets. Set A has 3 elements, set B 5 elements and set C
has 6 elements.
= {, , }
= {1,2,3,4,5}
= {1000,2001,3003,4004,5999,6555}
Infinite Sets: An infinite set is a set where we cannot possibly list all the numbers.
Therefore we denote an infinite set as follows.
= {1,2,3,4, } or = {1,2,3,4, }
For instance we can write the sets of natural numbers N and the set of real numbers in
the following way.
= {1,2,3,4, }
= {1,2,3,4, }
Intervals: If we have two number and then the set of all the numbers between and
and is called an interval of the set. An open interval is where the end points and are
excluded and is denoted as:
(, ) = { 1 : < < }
A closed interval is where the end points and are included and is denoted as:
[, ] = { 1 : }
If only one of the two end points is included in the interval then is called a half closed or half
open set which we denote as (, ] or [, ). Given the above definitions we know that there
are types of infinite intervals where we have the number and :
(, ] = { 1 : }
(, ) = { 1 : < }
[, +) = { 1 : }
(, +) = { 1 : > }
(, +) = 1
The Empty Set: The empty set or null set contains no elements. Every subset contains the
empty set, including itself. So we may not always expressly show the empty set when we
write out a set but it is important to note that the empty set will be a subset of any set. We
denote the empty set as the following:
= { } or
The empty set is the only set in which every property holds. Please note that the empty set
is a subset of every set
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Equal Sets: Equal sets are two sets which contain the same elements but the elements are
in different order. Although the sets A and B, below have different order they are equal
because they contain the same elements. Remember that the order of a set is irrelevant.
If = {5,3,2,4,1} and = {1,2,3,4,5}, then the sets are equal ( = )
Subsets: A subset is a set within a set. The set is a subset of if and only if every
element of is an element of which is denoted as . A subset is defined as,
,
Also because these sets are equal it holds that if and then =
If = {1,2,4,7} and = {, , 3, } then because every element of is an element in

.
Proper Subset: A proper subset is a subset where not every element in is an element in
. This means that is a larger set that contains the smaller set .We denote the proper
subset as . Formally:
( , )
Essentially the proper set means that is the subset of but is larger than . So there is
at least one more element in than in .
If = {1,2,4,7} and = {, , 3, , 5,6, , 8,9,10} then because every element of is an
element in , and has at least one more element than . In fact in this case has 6 more
elements than .
The domain of a function defined as a subset: Some functions are based only on
subsets of . Given the function the set of numbers which the function () is defined is
called the domain of . There are reasons why the domain of a function may be limited. The
most common reasons for restricted the domain is that we cannot divide by zero, and cannot
1
take the square root or logarithm of a negative number. For example () = 2 the domain is
all except for 1 or +1. The domain of a function may also be restricted by the economic
application. In economic applications we mostly deal with sets with non negative numbers
and therefore the domain is restricted. If the function () is the cost to produce 100
computers then we can denote the domain of as:
+ { 1 : 0}
Example 2: Subsets
In the following diagram is a proper subset of the set because every element in is also
an element in .
is a subset of if and only if every element of is an element of ,
is a subset of because if we
pick an arbitrary element of
say 1 then this element is also
in the set
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Example 3: Subsets
In the diagram below set is not a subset of because, although some elements are, not all
elements in are elements in the set . To be a subset every element of must be an
element in .
is a subset of if and only if every element of is an element of
is not a subset of because if

we pick an arbitrary element of
say 1 then this element is
not an element in the set .
Remember that every element
in the subset must be an
element in the set.
The Universe::The universe is the space of all possible elements. For example, when
working with real numbers, then could be the universe.
Intersection of two sets: The set containing the elements that are common to both sets is
called the intersection and is denoted by . The intersection of two sets is denoted as:
= { | }
The intersection of many sets: Given a collection of many sets , where the index
values that belong to some other set called , then:
= {| }
Example 4: Intersection
Suppose that we have the following two sets = {, 4, , 8} and = {1, , 5, , 7,9,11}. The
intersection of and is = {2,6}, where 2,6 . The intersection will include all
the values that are elements in both sets.
= {2,6}, where 2,6
2
6
is not a subset of because not

every element in is an element
in the set. The intersection of the
two sets contains the two
elements common to both sets.
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Example 5: The intersection between 3 sets

Suppose we have 3 sets : {1,2,3,4}, : {2,3,4,5,6,7} and : {3,4,8,9,10} the intersection of ,
and will be the set of elements that are common to all three sets. That is = {3,4}
= {3,4} where 3, 4
4
3
2
The intersection between the three

sets is the set containing 3 and 4. It is
easy to notice that = {2,3,4}
and
that
= {3,4}
and
= {3,4}
Example 6: Intersection
Find the intersection between the following sets, : {1,2,3} and : {4,5,6} ?
In this case there is not intersection between the sets. This is known as a disjoint.
As you can see there is no overlap in

between these sets and therefore There
are no elements common to both sets
and therefore no intersection.
For any sets , and , the following statements hold:
( ) = ( ) ( )
Unions of two sets The union of two sets is the set which contains all members of the two
sets and is denoted by the symbol . The union of two sets is denoted as:
= { | }
The unions of many sets: Given a collection of many sets , where the index values
that belong to some other set called , then:
= {| }
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Example 7: The Union of two sets

If we have the sets = {2,4,8} and = {1,2,5,6,7,9,11} then the union will be all the
elements of both sets. This means that every element of both sets is part of the union.
Therefore the union between the sets and is = {1,2,4,5,6,7,8,9,11}.
= {1,2,4,5,6,7,8,9,11}
1
11
The union of the two sets contain all

the elements of both sets. No element
in either set is left out.
6
9
Example 8: The union between 3 Sets

Again, we have 3 sets : {1,2,3,23}, : {1,2,6,7,15} and : {3, 2,1,9,10} the union of ,
and will be the set of all elements of three sets.
That is = {3, 2,1,2,3,6,7,9,10,15,23}
The union between the three sets is the set

containing all the elements of all the sets.
It includes all the elements in the
combined space of the three sets in the
diagram.
For any sets , and , the following statements hold:
( ) = ( )
Disjoint The sets and are defined as a disjoint if there are no common elements
between the two sets. In other words each set is completely different to the other set. We
have already seen a disjoin in example 6.
Example 9: The Disjoint
If : {2,4,6,8} and : {1,3,5,7,9,11} then we call this a disjoint, as there are no elements
common to both sets.
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As you can see there is no overlap in

between these sets and therefore There
are no elements common to both sets
and there is a disjoint.
The Compliment: Let be a set in space then we define the compliment as

= { | } .The compliment of A and B is a all the elements in the sample
space that are not elements of A or B. This is shown in general form in the following
diagram below. Where represents the union between the sets and we define
the compliment of the union as or .
= {: }
Example 10: Complement of Set

Suppose we have the set : {, , , } in the space : {, , , , , , , } then the compliment
of the set is = { | } = {, , , }
The area comprises all the elements

that are not in the set .
Example 11: Compliment of a Set

Suppose we have the set : {1,2,3,4} in the space : {1,2,3,4,5, ,100} then the compliment of
the set is = { | } = {5,6,7, 100}
The area comprises all the elements

that are not in the set . represents
the entire space including both and
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For Compliments the following formulas hold:

( ) =
=
=
The difference between two sets: If we have two sets and and we subtract from
then we have the difference between the two sets. If we define the space of these sets as
then we can write this as:
= { | }
This operation will remove all the elements of that are also elements of . Essentially the
intersection between and is excluded from .
Example 12: Difference between sets
Suppose we have the sets : {1, 2, 3,4} and : {1,2,3,4,5} , in the space then the
difference between the sets will be = { | } .
= { | } = {1, 2, 3}
-1
-2
-3
The intersection of and , which is 4,

is now taken out of the set . In
this diagram we have explicitly shown
the space the two sets operate in.
= {1, 2, 3}
The Symmetric Difference: The symmetric difference between two sets is the operation
where the intersection of two sets is subtracted from the union of two sets. If we have two
sets and then the symmetric difference is:
This is the same as
= { |[ ] [ ]}
: ( ) ( )
,
Example 13: Symmetric Difference
: ( ) ( )
Find , where : {3, 2,1,2,4} and : {4,5}
: ( ) ( )
: {3, 2,1,2} {5} = {3, 2,1,2,5}
Example 14: Symmetric Difference
Find [( )] ,where : {3,4,9,13}, : {1,2,4,7,12} and : {1,4,7,9,12,13}
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( ) = [ ( )] [( ) ]
As ( ) = {1,4,7,12}, therefore
[ ( )] [( ) ] = {3,9} {1,7,12} = {1,3,7,9,12}
Therefore [( )] is
[( )] = {1,3,7,9,12} {3,4,9,13} = {3,9}
[( )] = {3,9}
Example 15: The Symmetric Difference
Suppose we have two sets : {1,2,3,4,5,6} and : {1,1,2,3} then the symmetric difference
between the two sets is:
: ( ) ( ) = {4,5,6} {1} = {1,4,5,6}
4
1
2
3
The = {4,5,6, }
The = {1, }
-1
The union of and is ( ) ( ) = {1,4,5,6}
We could also use the following equation to derive the same result.
: ( ) ( ) = {1,1,2,3,4,5,6, } {1,2,3} = {1,4,5,6}
4
1
2
3
-1
The intersection of and is = (1,2,3)

The union of and is =(-1,1,2,3,4,5,6)
This means that we get all the elements of both
sets and then subtract the elements of the
intersection to end up with {1,4,5,6}
The Cartesian Product

The Cartesian Product is the pairs of elements resulting from the multiplication of two sets.
So if we have two sets and then the Cartesian Product of these two sets is the set made
up of all the ordered pairs, (, ).
= {(, )| , }
For sets , , , the Cartesian product is denoted formally as:
= {(, , , )| , , , }
Example 16: The Cartesian Product
If = {2,4,6,8} and : {1,3}, then the Cartesian Product is
= {(2,1), (2,3), (4,1), (4,3), (6,1), (6,3), (8,1)(8,3)}
If = {, } and : {2, , , 320}, then the Cartesian Product is

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= {(, 2), (, ), (, ), (, 320), (, 2), (, ), (, )(, 320)}
If = {3, } and : {2, } and : {1,7}, then the Cartesian Product is
= {(3,2), (3, ), (, 2), (, ), (3,1), (3,7), (, 1)(, 7)(2,1)(2,7), (, 1), (, 7)}
Proof Techniques for Statements About Sets
In this text we do not explicitly deal with mathematical proofs as it is not essential in
gaining intuition of basic mathematical applications. However this being said, having the
ability and technique to construct proofs can be extremely important when working with
pure mathematics and abstract problems solving. Subsequently as sets are a fundamental
part of mathematics, and proofs of sets are relatively simplistic compared to various other
mathematical proofs, it is probably a good starting point. If you wish to skip this section the
next section 3.3 describes the properties of set operations.
To make proofs about sets we usually pick an arbitrary element from one set and prove that
it either belongs or does not belong to the other set or sets. For instance we may want to
prove that the set is equal to set , that is = . To prove these sets are equal we prove
that and that . To prove that is contained in the set , we simply pick
a random element from such as and show that it is contained within that is .
Then to prove that we just follow the same logic by choosing a random element of ,
say and show that . Basically there are two parts to the proof but the same
technique is used. It is important to note that the element chosen should not have any
special characteristics and should just be a generic element of the set.
If we want to prove that then we have to find an element that does not belong . In
this case the arbitrary can have a special characteristic and being generic is not important.
Please note that we do not have to follow this methodology strictly. Once you become
familiar with the properties of set operations, you can often use other properties to construct
your argument. Also another way to construct proofs about sets is to construct a truth table,
which will be covered further in this text.
Properties of Set Operations
There are certain properties which always hold for any sets , and . To prove theses
properties is quite simple and you can just use the proof techniques above for given sets to
show the following hold.
=
=
=
=
( ) = ( )
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( ) = ( ) ( )
The last two properties are proved in the following examples.
Complements: For Compliments the following formulas hold:

( ) =
=
=
( ) =
De Morgan's Law: A well known pair of results known as De Morgan's Law holds for
every sets and .
= ( ) which is also expressed as = ( )
More Results,
( ) = ( ) ( )
( ) ( ) = ( ) ( )
Example 19: Set Proof
Prove that ( ) = ( ) ( ).
This is equivalent to claiming that:
( ) ( ) ( ) and ( ) ( ) ( ).
We need both inclusions to be true to prove the equality holds.
Part 1: Show that ( ) ( ) ( )
Now we want to pick an arbitrary element in the first term ( ), that is

( ). As this is a union between and the intersection of and , then we know
that can belong to either or . This means that or , and we must
examine both cases.
1. If then we know that must belong to the second term, because and
. Therefore it must be the case that ( ) ( ).
2. If then it must be the case that belongs to both and . Therefore it must
be the case that belongs to both and , which we express as and
. This implies that ( ) ( ).
In both cases we always have ( ) ( ).
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Let be an arbitrary element and ( ) ( ). This means that must belong to

both and , that is ( ) and ( ). This means that is either an
element in or and . This means that or . Again we have two
arguments.
1. If , then it must be the case that ( )
2. If then it must be the case that ( )

In both cases we have the same result ( )
As ( ) ( ) ( ) and ( ) ( ) ( ), it must be the case

that ( ) = ( ) ( ).
Proof Concluded.
Example 20: Set Proofs

Prove that ( ) = ( ) ( )
( ) ( ) ( ) and ( ) ( ) ( )
We need both inclusions to be true to prove the equality holds.
Let be a randomly chosen element in ( ). Therefore and and both

sets must be examined.
1. If then it must be the case that and . If belongs to both
and , then must belong to their union. This means that ( ) ( ).
2. If then can belong to either and or . If then will belong to the set
( ) ( ), ( ) ( ). However if does not belong to , that is
then the element must belong to the set as . If belongs to the set it
must be the case that ( ) ( ). Therefore it must be that
( ) ( ).
Therefore ( ) ( ) ( )
Let be an arbitrarily chosen element from ( ) ( ), therefore ( ) (

). This means that belongs to ( ) and ( ). Both these sets need to be examined.
1. If ( ) then must belong to both and . This means that and , and
it must be the case that ( ) and ( ).
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2. If ( ) then must belong to both and . Therefore ( ) and

( ). Hence ( ) ( ).
Therefore ( ) ( ) ( )
As ( ) ( ) ( ) and ( ) ( ) ( ) it must be the case

that ( ) = ( ) ( ).
Proof Concluded.
Example 21: Proof of Sets

Prove that ( ) ( ) = ( ) ( )
( ) ( ) ( ) ( ) and ( ) ( ) ( ) ( )
Again we need both inclusions to be true to prove the equality holds.
Part 1: Show that ( ) ( ) ( ) ( )
Let ( ) ( ) be arbitrary. Suppose that = (, ) and therefore and

which means that . In addition and and therefore .
Therefore because a randomly chose element = (, ) is contained in both ( ) and
( ) it must be the case that = (, ) ( ) ( ). This means we have shown
that a randomly chosen element from the first term ( ) ( ) is an element of the
second term ( ) ( ) . Now we must be able to show the reverse.
Part 2: Show that ( ) ( ) ( ) ( )
Suppose we pick a random element in contained in ( ) ( ). This is

( ) ( ) is arbitrary. Also suppose that = (, ) ( ) ( ) where
( ) and ( ). This implies that , , , and . Thus
= (, ) ( ) and = (, ) ( ). Therefore ( ) ( ). This shows
that a randomly chosen element belonging to the first term ( ) ( ) is also an
element contained in the second term ( ) ( ).
( ) ( ) ( ) ( ),
As ( ) ( ) ( ) ( ) and
have been proved we have also proved that ( ) ( ) = ( ) ( ).
Proof Concluded.
De Morgan's Law: A well known pair of results known as De Morgan's Law holds for
every sets and .
Firstly we display these equalities in the following diagrams and the proceed with a formal
proof.
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The union of and includes all the

elements and represented in the diagram
as the space of , and .
The intersection of the two sets is simply

.
represent the space in which these sets

occur.
The compliment is represented by the total grey area

surround the set .
The compliment is represented by the total grey area

surround the set .
The compliment is actually the total space subtract the space of

set . This means that = .
( ) =
( ) =
If we have the intersection then the compliment of this

set will be the space surrounding the intersection. This is
represented by the grey area labelled ( ) , which surrounds
.
The compliment is actually the total space subtract the space of

set . This means that = .
= ( )
= ( )
( ) is represented by the total grey area surround the union

of the sets. This is equal to as we can see by putting the
above two diagrams together then counting or observing the grey
area. So this picture is the amalgamation of the two above
diagrams for and .
Example 22: De Morgan's Laws

Prove the following equalities hold.
= ( )
= ( )
First we will prove = ( ) by showing ( ) and ( )
1. Prove = ( )
Part 1: Show that ( )
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Let be a randomly chosen point in . This means that can be in either or ,

that is or . If then it must be the case that and because is a
subset of it must be that . (If is not an element in then it can never be
an element in the intersection of and any set). Subsequently ( ) . Also if
then it must be the case that and because is a subset of it must be that
. Hence ( ) .So either way we always have ( ) . This means that
( ) holds.
Part 2: Show that ( )
Let be an arbitrary point of ( ) . Then which means that is not an

element in either set, and . Therefore it must be the case that or .
Hence . This means that ( ) holds.
Therefore = ( ) holds.
Proof Concluded.
2. Prove = ( )
For the second equality = ( ) , we need to show that ( ) and

that , ( ) . We can use the same method above to prove this. However we
can instead use the first equality = ( ) (as we have proved this holds) and the
properties of the set operations, in particular ( ) = .
Let = and let = . We can then by applying the property ( ) = to = and

= . This is = and = . Now we just substitute our values into the first
equation which we know is true because we have just proved it above.
Using = ( ) and the fact that ( ) =
Therefore,
( ) = ( )
= ( )
= ( )
We know that these two equations are equal. To get them into the correct form we just take
the compliment. Just for clarification ( ) = but (( ) ) = , so when we take the
compliment of ( ) we are actually doing (( ) ) = .
( ) =
This is the equality we want to prove with a distinct notation for the sets and is equivalent
to:
( ) =
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Therefore we have shown that,

= = ( ) = ( )
Although it is unnecessary, If we reverse the equality we have exactly what we wanted to

prove = ( ) .
Proof Concluded.
Please note that you can also express De Morgan's Laws as:
= ( )
= ( )
Example 23: more proofs of set operations
Prove that for any pair of sets and ,
( ) ( ) ( )
Here we are just trying to see whether an element of ( ) ( ) is contained within the set
( )
Firstly because it is a multiplication proof we need to use an arbitrary element = (. ).

This arbitrary element is obviously the product of from and from . Therefore if
, then and . This means that and therefore it must be the
case that ( ) .
Therefore ( ) ( ) ( ) .
Proof Concluded.
Example 24: Proofs of Set Operations

Prove whether the following is true or false.
For any two sets and
= ( )( )
First, write out the equation using the difference, : ( ) ( )
= ( )( ) = [( ) ( )] [( ) ( )]
The first term is the union of the two unions, and contains all points in the universe. This
means that if we subtract something from this, the remaining set is the complement of the
second term.(If X is a set and S is the universe of points then, S X = X c ) In this case all
that remains is the complement of the second term.
= ( )( ) = [( ) ( )]
This term is equivalent to ( ) ( )
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(Hint: whenever you have term that is a complement of a complement then you should
always think back to De Morgan's Laws and see if you can use the laws in your proof)
= ( )
= ( )
[(C Dc ) (D C c )]c = (C Dc )c (D C c )c = C C D (Dc C)
However we know that C c D = D C and that Dc C = C D.
This means that C C D (Dc C) = (D C) (C D) = CD

Therefore we have shown that,
CD = (C Dc )(D C c ) = [(C Dc ) (D C c )]c = (C Dc )c (D C c )c =

= C C D (Dc C) = (D C) (C D) = CD
= ( )( ) is true.
Proof Concluded.
Logic and Truth Tables for Sets

Truth tables can be applied to set operations. To use truth tables we simply put a number 1
into the box if it is true and zero if it is false. This is a simple way to sort out confusing set
information in an ordered way.
If then is denoted . The logic equivalence of " " is " " , which
means if not then not . Also note that there is logical equivalence between the
statements "( )" and "() and ()". In truth tables we use the rules of logic and
subsequently the order or statements is significant. Consider the following truth tables
0
0
1
1
0
1
0
1
and
0
0
0
1
or
0
1
1
1
0
0
1
1
0
1
0
1
1
1
0
0
1
0
1
0
( )
1
1
0
0
() and()
1
0
0
0
1
1
0
1
"
1
1
0
1
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Example 29: Truth Tables and Sets

is a subset of if and only if every element of is an element of ,
is a subset of because if we
pick an arbitrary element of
say 1 then this element is also
in the set
We can write this as, if then , , to prove that is a proper subset of , we can
use truth tables.
0
0
1
1
0
1
0
1
1
1
0
0
1
0
1
0
"
1
1
0
1
1
1
0
1
Therefore if and then is not a subset of . However an element can belong to

and not be contained within , which is true because is a proper subset of . Therefore
to provide evidence that proves that is not a subset of all we have to do is pick an
arbitrary element and show that the third row is true. From the diagram we can see that
and therefore .
We can apply these rules to sets using more general notation.
0
0
1
1
1
0
0
1
0
1
0
1
The first row says that if the element is not in then it is in . If the element is
not in then the element is in the compliment . By using the truth table we can see
where an element belongs based on the information. For instance in the last row the element
is in both and and therefore must be in the intersection of these two sets.

Show that = ( )

1
1
0
0
( )
0
0
0
1
0
0
0
1
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From the truth table we have constructed we can see that if an element belongs to
( ) , that is ( ) then it must be the case that .
Show that ( ) = ( ) ( )
0
1
0
1
1
1
0
0
1
1
0
1
0
0
0
0
1
1
( )
0
0
0
0
0
1
( )
0
0
0
1
0
1
( )
0
0
0
0
1
1
The truth table above contains all the possible scenarios and from this we can see that if
( ) then ( ) and ( ) which means that ( ) ( ).
Therefore ( ) = ( ) ( ).
Power Sets
The power set is denoted 2 and is the set of all subsets of the set . A power set is a set
where each element of the set is also a set. If there are 2 elements in contained in the set
then the power set will contain 4 elements where each of these elements is itself a set. This
means that if a set has exactly elements then it's power set will have 2 elements. This
concept is best explained through demonstration.
If set = {1,2,3} then the power set is 2 = {, {1}, {2}, {3}, {1,2}, {1,3}, {2,3}, {1,2,3}, } .We
can also write this power set as 2 = {, {1}, {2}, {3}, {1,2}, {1,3}, {2,3}, }.
As the power set is a set, we can compute the power set of a power set. The power set of a
power set is denoted as 22 . For set above the power set of the power set would have 28
elements, which are sets.
If = {, } then, the power set is
2 = , {}, {}, {, }
and the power set of the power set is
22 =
2 , , {}, {}, {}, , , {}, , {}, {, }, {}, {}, {}, ,
{}, , , {}, {}, {, {}, }, {, {}, }, {}, {},
The attributes and mechanics of power sets are further demonstrated in the following
examples.
Example 25: Power Sets
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Suppose we have two sets = {, , } and = {, }.
Calculate 2 2 and 2
First lets define the 2 and 2 .
2 = {, {}, {}, {}, {, }, {, }, {, }, }

2 = {, {}, {}, }
Therefore,
2 2 = {, {}, {}, {, }, {, }, {, }, }
2 = , {}, {}, {, }
For the sets = {1,5} and = {1,3}, then calculate 2 2

2 = , {1}, {3}, {1,3}
Therefore
2 2 = , {1}
For the sets = {, } and = {, , }, then calculate 2 2

2 = {, {}, {}, }
Therefore
2 = {, {}, {}, {}, {, }, {, }, {, }, }

Prove that for any sets and :
2 2 = , {}, {}, {, }
2 2 = 2
First we prove that 2 2 2 . Let be arbitrary point contained in 2 2 , that is

2 2 . This means that 2 and 2 . As 2 and 2 this implies that
and that . Therefore it must be the case that . This implies that is an
element in the power set of the intersection 2 because 2 . This proves that
2 2 2 .
Now we prove that 2 2 2 . Suppose that 2 , where is arbitrary. The power
set 2 contains only elements in the intersection of and and therefore 2
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and . As then and , and 2 and 2 it must be the

case that 2 2 . This proves that 2 2 2 .
As we have proved 2 2 2 and 2 2 2 it must be the case that the
equation holds, that is 2 2 = 2 .
Basic Properties
Summary of the Properties of Set Operations

=
( ) = ( )
( ) = ( ) ( )
Complements
( ) =
=
=
De Morgan's Law
( ) =
Other Properties
( ) = ( ) ( )
( ) ( ) = ( ) ( )
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Mathematics For Economists
Partitions of a Set
Introduction to Partitions
A finite partition of set is a finite collection of all the non empty subsets contained within
, based on a given division of set. In other words the original set is divided or separated
into a collection of non empty subsets. The concept of partitions is widely used in game
theory and information based applications.
Consider a non empty set . A finite partition of is a finite collection of non empty subsets
1 , 2 , , for some {1,2,3, } such that = and,
=
=1
We can also say that the set = {1 , 2 , , } is a partition of .

Example 29: Economic Application of Partitions
It is common for economists to forecast the state of the future economy or model
uncertainty. Suppose that a set includes four different states of the world where each state is
a decomposition of economic variables. This means that every state of the world consists of
variables such as inflation, interest rates and gross domestic product. Also let be an agent
and is the agents knowledge partition. The knowledge partition is the agents
decomposition of the space in several subsets. This means that it is the agents choice of the
variables inflation, interest rates and gross domestic product. Although there are several or
many possible states of the economy, only one is actually going to happen. We define this
state as the true state .
The agents knowledge partition is:
= 1 , 2 , , , where = and
=1 = where represents the total state space
If the agents forecasts that the future state is in the partition = 1 , 2 , 3 , 4 where
each partition is a set of possible future states . This means that all the possible future
states are contained in the space which is divided into these four partitions. Therefore the
true state must belong to one of these four sets.
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= {1 , 2 , } and = 1 , 2 , 3 , 4
w
w
Each area is a partition

for agent and represents
the possible states of the
world within that partition.
The is the true state of the
world. In this example
1 .
Eventually agent learns that the true state is in 1 , that is 1

Refinements
Consider the two partitions = {1 , 2 , , } and = {1 , 2 , , } of a non empty set .

The partition refines if and only if that for every element of there are elements
1 , , such that:
=
=1
This means that is a refinement of if each element of partition can be written as

the union of some elements of the partition .
Any partition of of refines itself.
Example 30: Refinements
Let = {2,4,6,8}. Suppose we have the following partitions of the set : = {2,4}, {6,8}
and = {2,6}, {4,8}. List all the refinement of and all the refinements of .
Refinements of :
1 = = {2,4}, {6,8}
2 = {2}, {4}, {6,8}
3 = {2,4}, {6}, {8}
Refinements of :
4 = {2}, {4}, {6}, {8}

1 = = {2,6}, {4,8}
2 = {2}, {6}, {4,8}
3 = {2,6}, {4}, {8}
4 = {2}, {4}, {6}, {8}
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Common Refinement: For a non empty set the Partition is a common refinement of
partitions and , if refines both partitions and . (in Example 30 above the only
common refinement is 4 = 4 )
Proper Refinement: For a non empty set the partition is a proper refinement of
partitions if partition refines partition and they are different partitions.
Coarsening: If partition refines partition , then we describe the partition as a

coarsening of partition .
Consider the following partitions, = {1}, {2}, {3,4}, = {1,2,3}{4}, = {1,23}, {4} and
= {1,2,3,4,5}.
The partition is a proper refinement of the partitions and . This means that and is
are proper coarsenings of . The partitions and are equal and this means that partition
is a refinement of partition and vice versa. However these refinements are not proper
refinements. Likewise partition is a coarsening of partition and vice versa, but they are
mot proper coarsenings. The partition is a common refinement of both and . Partition
is a common coarsening of and . Also partition is common coarsening of and .
For simplification refer to the table below.
Refinement of
Coarsening of
Common
Proper
Common
Refinements of Refinements of Coarsenings of
Z,Y
Y,Z
Proper
Coarsenings of
X,Z
X,Y

Suppose a set has exactly 100 elements. Consider a partition of this set, which contains
exactly 99 elements. That is = {1 , 2 , 99 }, where all , = 1 2 99 and
= , if . How many distinct refinements does the partition have?
As the partition has exactly 99 elements and there is 100 elements in the set . It must be
the case that exactly one contains two elements. All the other are sets having just one
element. By using generic numbers we can show this.
If = {1,2, ,100} then let:
= {1 , 2 , 99 } = {1}, {2}, {99,100}
Now find the refinements of this partition. Please note that the indexes 1 and 2 below are
just to label the refinement number and do not correspond to the sets in the partition
above.
1 = = {1}, {2}, {99,100}
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2 = {1}, {2}, {99}, {100}
Therefore there are two distinct refinements.

The set has exactly 100 elements. Consider two element partitions of the set . That is
= {1 , 2 }, where 1 , 2 , 1 2 and = 1 2 .
(a)How many different 2 element partitions does have?
(b)How many different 2 element partitions does have if we require that #1 = 1 and
#2 = 99?
For any 2 element partition = {1 , 2 } of it must be the case that once we fix one of the
elements say 1 then 2 = 1 . Therefore to find the different 2 element partitions we
just need to know the number of non empty proper subsets of and divide by 2. We divided
by two because we know that if there are 100 elements then there will be 50 2 element
partitions. This is demonstrated in the following hypothetical partitions:
= {1}, {2, ,100},
= {2}, {1, ,100},
= {1,2}, {3, ,100}
= {1,2, 50}, {51, ,100}

= {1,2, 99}, {100}
To find the number of non empty proper subsets of we use the power set of . Remember
that the power set is the set of all subsets of the set . A power set is a set where each
element of the set is also a set. As there are 100 elements the number of non empty proper
subsets will be 2100. That is:
2 {, {1}, {2}, , {100}, {1,2}, {1,3}, , {1, . . ,50}, , {1, ,99}, }
However we want the number of non empty proper subsets and the power set includes both
the empty set and the set , which is not a proper subset. Therefore we just subtract two
away from the power set to get the number of non empty proper subsets.
2 2
Now we just divide the number of non empty proper subsets by 2 because we want to know
the number of 2 element partitions. Therefore:
2 2 2100 2
=
= 2100 1
2
2
(a)There are 2100 1 different 2 element partitions.
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(b) If #1 = 1 then 2 = 1 , meaning there is no freedom to choose the elements of 2 .

In fact the elements of 2 is characterized completely by 1 . Every time we choose an
element of 1 we have a different 2 element partition. We can choose 100 possible elements
for 1 . Therefore there are 100 elements if #1 = 1 and #2 = 99.
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Joins and Meets

Introduction to Joins and Meets
The meet and join are binary operation that occur over the set of all partitions of a set. The
meet and join of two partitions allows us to organise the information common to both sets in
order to find the finest common refinement and finest common coarsening. Joins and Meets
have useful applications in information, game theory and knowledge models.
Meet: The meet of and is the finest common coarsening of and . The meet of and
is denoted as .
Join: The join of and is the finest common refinement of and . The join of and
is denoted as
This concept is easily explained through an example.
Example 33: Joins and Meets

Let = {2,4,6,5,7} and suppose that we have the following partitions:
= {2,4}, {6,5,7}
= {2,6}, {4,5,7}
In this case the meet and join are, respectively
= {2,4,5,6,7}
= {2}, {4}, {6}, {5,7}
Although the partition {2}, {4}, {5}, {6}, {7} is also a common refinement, there is a coarser
common refinement and the join is the coarsest common refinement of and .
Another Method to Calculate Meets and Joins
For each let () denote the unique such that . Given two partitions
and of the same set , we can define their meet and their join as follows. Suppose that we
represent the meet and join as.
= 1 2
= 1 2
for some positive and . Then the elements 1 and 2 are in the same element of the
join if and only if they are both in the same element in the partition and they are also in
the same element in .
An Alternative Definitions for the Join
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For every , the join is defined as () by:
() = () (),
This means that the elements of the join are subsets of the elements of each partition.
Therefore the join is a refinement of and also a refinement of .
In the above example the elements of the join are {2}, {4}, {6}, and , {5,7}, and the elements of
the partition are {2,4} and {6,5,7}. Therefore every element of the join is a subset of the
elements in the partition. For instance the element {2} in join is a subset of the element {2,4}
from the partition . The same logic applies to the partition .Thus the join must be a
refinement of the partition and the partition .
An Alternative Definition for the Meet
For any let, () = () and () = (), then we define the elements of

the meet as:
For every :
() = () () () () ()
The above statement requires calculating the union of infinitely many sets, but since is
finite, every () must also be a finite set, and, at some finite point, there is nothing more
to add to the infinite union.
Example 34: Join and Meets
Let = {1,2,3,4,5,6,7,9,12} and suppose that we have the following partitions:
= {1,2,9,12}, {3,4}, {6,7}, {5}
= {1,2}, {3,4,6}, {7}, {5,9,12}
In this case the join and meet are, respectively
= {1,2}, {3,4}, {5}, {6}, {7}, {9,12}

= {1,2,5,9,12}, {3,4,6,7}
Note that any two points that are in the same element of the join are also together in both
partitions and . To demonstrate what this actually means we can draw arrows
connecting the two point elements of the join and elements of partitions.
= {1,2,9,12}, {3,4}, {6,7}, {5}
= {1,2}, {3,4}, {5}, {6}, {7}, {9,12}
Note that for the meet every pair of points that are in the same element of the meet, for
instance 1 and 5, there is a path linking them. The path is mathematically represented as
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0 (1 ) and 1 (2 ). In this particular example the path linking 1 and 5 is 9. That is

for 0 (1 ) we have 1 (9) and for 1 (2 ) is 9 (5).
Example 35: Joins and Meets
Let = {1,2,3,4,5,6,7,9,12} and suppose that we have the following partitions:

= {1,2,9,12}, {3,4}, {6,7}, {5}
= {1,2}, {3,4,6}, {7}, {5,9,12}

= {1}, {2,3,5}, {4,6,7}, {9,12}
The join and meet for partition and partition , are respectively
= {1,2}, {3,4}, {5}, {6}, {7}, {9,12}
= {1,2,5,9,12}, {3,4,6,7}
The join and meet for partition and partition , are respectively
= {1}, {2}, {3}, {4}, {5}, {6,7}, {9,12}
We can also compute ()

and ()
also
and ()
= {{1,2,3,4,6,7,9,12}{5}}
() = {1,2,3,4,6,7,9,12}, {5}
() = {1,2}, {3,4,6}, {5}, {7}, {9,12}

= {1}, {2}, {3}, {4,6}, {5}, {7}, {9,12}
() = {1,2,9,12}, {3,4,6,7}, {5}
Diagrammatic Method to Calculate the Join and Meet
Often it is useful to use matrix diagrams to calculate joins and meets. If partition has five
elements and partition has four elements we construct a 4 5 matrix. Partition is
represented in at the top for the columns and partition the rows. Once we setup the
matrix we can simply use it by ensuring that each state is written in the same row that
contains this state in the partition and in the same column it appears in partition .
To calculate the connected components we choose any state and draw all the vertical and
horizontal lines from the this state to other non empty cells. Upon reaching another state we
simply repeat the process of drawing horizontal and vertical lines. We continue this until
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there are no new non empty cell that can be reached. Essentially we just follow the
connected points of each state until we cannot find any more connected points. It is
important to note that some states are directly reachable through a single connection but
other states are indirectly reachable. All the reachable states, directly or indirectly, are
included in the connected component state. The meet is the collection of all the sets of
connected components and the join is obtained by looking at each non empty cell and taking
the partition.
Example 36: Diagrammatic Calculation of Joins and Meets
Let = {1,2,3,4,5,6,7,8, } and consider the partition = {1,2}, {3,4}, {6,7}, {5}, {8} and
= {1,6}, {4,5}, {2,7,8}, {3}. The we can represent these partitions in the diagram below. As
partition has five elements and partition has four elements we construct a 4 5 matrix.
A
{1,2}
{1,6}
B
{3,4}
1
{4,5}
{2,7,8}
{3}
{6,7}
{5}
{8}
6
4
5
7
We start with the state = 1 and draw a line to every to every other state that is
connected directly to this state. The states directly reachable from = 1 are = 2 and
= 6. The states that are indirectly reachable from = 1 are those that are reachable from
the directly reachable states. Therefore we draw lines from state = 2 to = 7 and = 8,
and then draw lines from state = 6 to = 1 and = 7. Now check if there are any
reachable states from = 8. As there are not any reachable states from = 8 we have
exhausted all the reachable states. The states = 1, = = 2, = 6, = 7 and = 8 are
the elements that are in the first element of the meet. That is {1,2,6,7,8}.
Now we must go to the next state that is not in part of the element above. Hence we start at
= 4 and draw a line to the reachable states = 3 and = 5. Then we find all the
reachable sets from = 3 and = 5. In this case there are no reachable sets from = 3
and = 5. Therefore the states = 3, = 4 and = 5 are elements in the an element of
the meet. That is {3,4,5}
Now we simply combine the two elements to calculate the meet:
= {1,2,6,7,8}, {3,4,5}
The join is given by the partition of all the non empty in the cells above. This means to
calculate the join we just write the set of all the connecting states in the non empty cells.
= {1}, {2}, {3}, {4}, {5}, {6}, {7}, {8}
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Consider the space = {1,2,3,4,5,6,7,8} and the partitions = {1,5,8}, {4,2}, {6,7}, {3} and
= {1}, {3,4,6}, {7}, {2,5}, {8}. Then we have the following 4 5 matrix.
P
{1}
{1,5,8}
{8}
{2,5}
{7}
{3,4,6}
{4,2}
{6,7}
{3}
2
7
Start at = 1 and draw the lines that directly reachable. The only line directly reachable in
this case is = 5 and = 8. We then draw lines the directly reachable from states = 5
and = 8. In this case the only reachable state is = 2. We continue this process and draw
lines to all the directly reachable states from = 2. This takes us to the state = 4. Again
we continue the process = 4 to = 6 and = 6 to = 3 and = 7. All the states
= 2, = 4, = 6, = 7, = 3 are all indirectly reachable from state = 1. Therefore
the meet and join are, respectively:
= {1,2,3,4,5,6,7,8}
= {1}, {2}, {3}, {4}, {5}, {6}, {7}, {8}

Consider the space = {, , , , , , , } and the partitions = {, }, {, }, {, }, {, , }
and = {, }, {, }, {, , }, {}, {}. Then we have the following 4 5 matrix.
Y
{a,b}
{c,d}
{a,d}
{b,c}
{e,f,g}
{e,h}
{f,g,i}
f,g
{h}
{i}
h
i
Start at = then draw lines to the directly reachable states = and = . Then draw
the reachable states from = and = and so on until we exhaust all the directly and
indirectly reachable states of = . The collection of the state is an element in the meet of
and . That is {, , , }. Now we go to the next state in , = and follow the same
process as that used for = . This is represented by the directly reachable states
from = to = and = , ,and the indirectly reachable states from = , to
= . Therefore the meet and join are, respectively:
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= {, , , }, {, , , , }
= {}, {}, {}, {}, {}, {, }, {}, {}
Suppose that two firms are bidding on a patent for a new technology. There are two
companies that wish to purchase the patent of this technology from the inventor. However
both firms have done different analysis on the possible outcomes this technology will have
once it is commercialised and ready for the market. The possible states of the world are
= {, , , , , }. The firms will base their bids upon what they believe the possible state
will be. However neither firm has perfect knowledge of the likely outcome. However each
players refinement represents their knowledge of the potential states of the world. A
refinement means that the firm has potentially better knowledge. For instance {, } means
that the future state could be either or . Once further knowledge or information is gained
we may be able to refine this to {a} and {d}. Therefore in this case the join represents direct
communication between the firms and the meet represents common knowledge.
Firm 1's partition of knowledge is 1 = {, }, {, }, {}, {}
Firm 2's partition of knowledge is 2 = {, }, {}, {, , }
Firm 2
{a,b}
{c}
{d,e,f}
{a,d}
a
d
Firm 1
{b,e}
{c}
b
c
e
{f}
Therefore the meet and join are, respectively:

12 = {, , , , }, {}
12 = {}, {}, {}, {}, {}, {}
The knowledge common to both firms is that the state of world is in either the first or
second element of the meet. Therefore if we believe the true state of the world once the
product is released will be in the second element we know that the true state must be .
However if a firm believes that the true state lies in the first element of the meet then the
firms know it can be either , , , and . This means that the finest common coarsening is
a representation of general knowledge. Alternatively we could say the meet is a refinement of
the space and is therefore information, but because the partition has few elements it is not
specific knowledge, and because it is the coarsest common refinement it is the most general
knowledge a firm can have.
The join is the coarsest common refinement and represents the knowledge or information as
resulting from direct communication between the firms. So once they share information they
have a much better understanding of the possible states. Therefore if they believe the true
state, upon commercialisation of the technology, lies in the first element of the join they
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know that the state must be and cannot be any other state. Each refinement represents an
increase in information or knowledge and therefore the firm can be more specific about the
possible state.
Suppose that the national secret service is seeking specific information about possible threats
and opens a dialogue with other nations intelligence services. Let the set of all possible states
be = {, , , , , , , } and there are four nations with the following partitions of
knowledge on the matter:
Nation 1: 1 : {, , }, {, }, {, , }
Nation 2: 2 : {, , , , }, {, , , }
Nation 3: 3 : {, , }, {}, {, , }
Nation 4: 4 : {}, {}, {, }, {, }, {}, {}
Suppose that Nation 1 is the nation seeking information regarding possible threats. Nation 1
firstly shares information with Nation 2. This is depicted in the following diagram.
Nation 2
Nation 1
{a,b,g}
{c,h}
{d,e,f}
{a,b,c,d}
ab
{e,f,g,h}
ef
Now Nation 1 has refined its knowledge partition as the join between its knowledge partition
1 and Nation 2's knowledge partition 2 .
1 2 = {, }, {}, {}, {, }, {}, {}
Now Nation 1 uses the join as its own knowledge partition when it opens information sharing
with Nation 3.
Nation 3
Nation 1
{a,b,c}
{d}
{a,b}
{c}
ab
{d}
{e,f}
{g}
{h}
e,f
{e,f,g,h}
Again the meet is the common knowledge and the join is the refinement of knowledge base
on sharing information. Therefore when Nation 1 uses 1 2 to refine its knowledge and
uncover the possible threats.
(1 2 )3 = {, }, {}, {}, {, }, {}, {}
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The join has not refined the partition and therefore has not revealed more information on
the possible threats to Nation 1. However Nation 1 decides to open discussions with Nation
4.
Nation 1
Nation 4
{a,b}
{a}
{b}
{c,d}
{e,h}
{c}
{d}
{e,f}
{g}
{f}
{g}
{h}
h
g
Nation 4 more knowledge than the other nations. This is evident as the matrix has a larger
dimension than the previous matrices. We can see that the join of these partitions reveals
more information about the situation.
(1 2 )4 = {}, {}, {}, {}, {}, {}, {}, {}
In fact this partition is the finest refinement and allows Nation 1 the best possible
information about the possible threats. It is also important to note that the meet is also
becoming more refined as we have finer partitions. This means that with more information
sharing the level of common knowledge is becoming more refined.
A Note on the Concept of Common Knowledge

The meet represents the Common Knowledge of players. Generally the notion of common
knowledge requires an infinite chain of statements. Obviously, if the state space is finite, after
some point statements become abundant. For example once all agents know a state is a possible
state, and all agents know that all agents know that all agents know that a state is a possible state
and this goes on and on indefinitely. Nevertheless, conceptually speaking, common knowledge
requires infinitely many checks.
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The Inclusion-Exclusion Principle

Inclusion Exclusion Principle
The Inclusion-Exclusion Principle is a useful tool to calculate the number of elements in the
union and has wide application in probability calculations.
The Inclusion Exclusion for Two Sets
The number of elements in a set is the number of elements in A plus the elements in
B, minus the number of elements in as this number was counted twice in n(A)+n(B)
therefore.
#( ) = # + # #( )
The union of and includes all

the elements and represented in
the diagram as the space of ,
and .
The intersection of the two sets

is simply .
represent the space in which

these sets occur. This is
sometimes referred to as the
It is simple to see why #( ) = # + # #( ). Let = #( ), = #( ) and

= #( ). The number of elements in is exactly + + , and the number of
elements in is + . The number of elements in is + and thus:
#( ) = + + = ( + ) + ( + ) = # + # #( )
The inclusion exclusion principle for Probability: If and are two events then the
probability that one event or the other will occur, ( ), is given by;
( ) = ( ) = () + () ( )
Example 41: The Inclusion-Exclusion Principle for Two Sets
Suppose that 60 people were interviewed for a position at a bank. 26 had an economics
degree, 40 had and finance degree and 9 had both an economics and finance degree.
(a) What is the probability that a person selected has both a finance and economics degree?
( ) =
9
60
(b) What is the probability that a person has a finance degree or an economics degree? Hint
use the inclusion exclusion principle
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ECONOMICS
( ) =
26 40 9
57
+
=
60 60 60 60
A firm has 14 employees: 5 are women and 9 are men. Three of the women and 5 of the men
are older than 40. If a person is chosen at random from this firm, what is the probability
that the person is male or over 40 years old?
( 40) = () + ( 40) ( 40
9
8
5
12 6
+
=
=
14 14 14 14 7
6
Therefore the probability that person is a male or over 40 year old is .
( 40) =
The board of directors consist of 9 liberals, 5 are female and 4 male, and 9 labour where 5
are male and 4 are female. If a director is picked at random to attend a meeting on behalf of
the company what is the probability that person will be a labour voter or female?
( ) = () + () ( )
( ) =
9
9
4
14 7
+
=
=
18 18 18 18 9
7
9
Therefore the probability that a director is a labour voter or female is .

How many number between 1 and 100 are multipliers of where = {5,7,35}. The quantity
of multipliers of 5 and 7 is equal to:
5 = 20
7 = 14
35 = 2
As 35 and its multiples are multiples of both 5 and 7 they represent the intersection. This
means that we will double count these numbers and therefore they must be excluded.
Therefore we can now use the inclusion exclusion principle to work out the number of
multiples of 5 and 7 between 1 and 100. By the inclusion-exclusion principle:
5 + 7 35 = 20 + 14 2 = 32
There are 32 number between 1 and 100 that are multipliers of 5 and 7.
The Inclusion-Exclusion Principle for Three Sets
Following the logic for two sets we can also use the inclusion-exclusion principle for three
sets. We state the inclusion-exclusion principle for three sets as:
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The union of and includes

all
the
elements
and
represented in the diagram as
the space of , , and
.
The intersection of the two sets
is simply .
represent the space in which

these sets occur. This is
#( ) = # + # + # #( ) #( ) #( ) + #( )
To see why this is true we need to use the property ( ) = ( ) ( ).

#( ) = #( ) = #( ) + # #( ) =
= # + # #( ) + # #( ) ( ) =
= # + # + # #( ) #( ) + #( ) #( ) ( ) =
= # + # + # #( ) #( ) #( ) + #( )
In the final step we have used the property ( ) = ( ) ( ).

Example 45: The Inclusion-Exclusion Principle for Three Sets
Suppose that it is Sports Day at a local school, and there are three major events, Shot-Put,
100m Sprint and High Jump. There are 300 students at sports day who have entered the
competition. We know that 60 contestants did the Shot-Put, 80 competed in the 100m and
50 the High Jump. We know that 30 students competed in both the Shot-Put and the 100m
Sprint, 25 competed in both the Shot-Put and High Jump and 15 competed in both the
100m Sprint and the High Jump. How many competitors competed in all three events
considering that 130 students competed in at least one event?
Let = # , = #100 and = # . Then:
#( ) = # + # + # #( ) #( ) #( ) + #( )
#( ) = 130 = 60 + 80 + 50 30 25 15 + #( ) =
130 = 120 + #( )
10 = #( )
Therefore 10 students competed in all three events.

In order to receive a scholarship students must all three tests in Mathematics, Economics
and English. Suppose that 1300 people participate in the contest for the scholarship and 200
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pass in Mathematics, 300 pass Economics and 600 Pass English. In addition 100 pass
Mathematics and Economics, 150 pass Mathematics and English and 200 pass both
Economics and English. If 800 Candidates passed at least one subject then how many
candidates passed all three tests?
Let = #, = # and = #, then
#( ) = # + # + # #( ) #( ) #( ) + #( )
#( ) = 800 = 200 + 300 + 600 100 150 200 + #( ) =
800 = 650 + #( )
150 = #( )
Therefore 150 students passed all three tests and are eligible for a scholarship.
How many numbers between 1 and 100 are multiples of 5,7 or 9?

5 = 20
7 = 14
9 = 11
35 = 2
45 = 2
63 = 1
315 = 0
#( ) = # + # + # #( ) #( ) #( ) + #( )
20 + 14 + 11 2 2 1 + 0 = 40
Therefore there are 40 number between 1 and 100 that are multiples of 5,7 or 9

Basic Set Theory

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Mathematics for Economists

Basic Set Theory

Example 1: Thinking about sets in applied economics

In microeconomics we are often studying an income as a function of education, experience

is a subset of every set

If = {1,2,4,7} and = {, , 3, } then because every element of is an element in

is not a subset of because if

working with real numbers, then could be the universe.

is not a subset of because not

Example 5: The intersection between 3 sets

The intersection between the three

As you can see there is no overlap in

For any sets , and , the following statements hold:

Example 7: The Union of two sets

The union of the two sets contain all

Example 8: The union between 3 Sets

The union between the three sets is the set

For any sets , and , the following statements hold:

As you can see there is no overlap in

The Compliment: Let be a set in space then we define the compliment as

Example 10: Complement of Set

The area comprises all the elements

Example 11: Compliment of a Set

The area comprises all the elements

For Compliments the following formulas hold:

The intersection of and , which is 4,

Find , where : {3, 2,1,2,4} and : {4,5}

: {3, 2,1,2} {5} = {3, 2,1,2,5}

Example 14: Symmetric Difference

Find [( )] ,where : {3,4,9,13}, : {1,2,4,7,12} and : {1,4,7,9,12,13}

[ ( )] [( ) ] = {3,9} {1,7,12} = {1,3,7,9,12}

[( )] = {1,3,7,9,12} {3,4,9,13} = {3,9}

Example 15: The Symmetric Difference

The union of and is ( ) ( ) = {1,4,5,6}

The intersection of and is = (1,2,3)

The Cartesian Product

Example 16: The Cartesian Product

If = {2,4,6,8} and : {1,3}, then the Cartesian Product is

= {(2,1), (2,3), (4,1), (4,3), (6,1), (6,3), (8,1)(8,3)}

Example 17: The Cartesian Product

If = {, } and : {2, , , 320}, then the Cartesian Product is

= {(, 2), (, ), (, ), (, 320), (, 2), (, ), (, )(, 320)}

Example 18: The Cartesian Product

If = {3, } and : {2, } and : {1,7}, then the Cartesian Product is

= {(3,2), (3, ), (, 2), (, ), (3,1), (3,7), (, 1)(, 7)(2,1)(2,7), (, 1), (, 7)}

Proof Techniques for Statements About Sets

The last two properties are proved in the following examples.

Complements: For Compliments the following formulas hold:

Now we want to pick an arbitrary element in the first term ( ), that is

Part 2: Show that ( ) ( ) ( )

Let be an arbitrary element and ( ) ( ). This means that must belong to

2. If then it must be the case that ( )

As ( ) ( ) ( ) and ( ) ( ) ( ), it must be the case

Example 20: Set Proofs

Let be a randomly chosen element in ( ). Therefore and and both

Part 2: Show that ( ) ( ) ( )

Let be an arbitrarily chosen element from ( ) ( ), therefore ( ) (

2. If ( ) then must belong to both and . Therefore ( ) and

As ( ) ( ) ( ) and ( ) ( ) ( ) it must be the case

Example 21: Proof of Sets

Let ( ) ( ) be arbitrary. Suppose that = (, ) and therefore and

Suppose we pick a random element in contained in ( ) ( ). This is

The union of and includes all the