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Optimization Methods in Economics 1 - WFU

Optimization Methods in Economics1 John BaxleyDepartment of MathematicsWake Forest UniversityJune 20, 20151 Notes (revised Spring 2015) to Accompany the textbook Introductory Mathematical Economics by D. W. HandsiiOptimization MethodsContentsPrefacev1 Elementary Comparative Static Equilibrium: A One-Good World .. Exercises .. Static Equilibrium: A Two-Good World .. Exercises .. Profit Maximization of a Firm .. Exercises .. 102 Comparative Statics in Many A Recapitulation .. Exercises .. ThenGood Equilibrium Model .. Exercises .. Competitive Firm withnInputs .. Exercises .. A Mathematical Interlude .. Optimization Problems .. Theorems .. Functions and Euler s Theorem .. Envelope Theorem .. Exercises .. 293 Optimization with Equality Utility Maximization in a Two Good World.

Chapter 1 Elementary Comparative Statics Max-min problems play a central role in every calculus course. Finding relative (local) max-ima and minima using the derivative and applying the rst or second derivative test is the

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