1.3 Constrained Optimization and the Budget Constraint - Class Notes
Contents
Overview
We begin with an overview of constrained optimization models and our first application, how individuals choose. Our primary focus will be people as consumers - how do they choose to spend their money and how do those choices change? While we will focus extensively on consumers making purchasing choices, do not think this is the only use of this type of model! Today we will cover the constraints in the model.
Slides
Practice Problems
Today you will be working on practice problems. Answers will be posted later.
Math Survey
Please turn in your math surveys. I will post “answers” after both sections have turned in their surveys.
Math Review
As we are beginning to work with math tools (graphing, algebra, linear equations, etc), I have posted a math review guideAlso now linked to on the Reference page
for all of the mathematical tools that are necessary for the class. It is fairly comprehensive, and in a more conceptual order than chronological order. You will not need to recall/understand everything right now, but it may be handy to consult over the semester as we introduce new economic concepts using different mathematical tools.