Mathematical Methods of Economic Analysis

ECO 7405 (Fall 2003)

The most commonly used mathematical methods in economics relate to optimization problems, and this course focuses on methods of optimization.

The course naturally breaks into three parts. The first part develops some basic mathematical tools of analysis which we will use to solve optimization problems. The second part covers classical, calculus-based methods of optimization---Lagrange multipliers and the Kuhn-Tucker theorem. The methods of Lagrange and Kuhn-Tucker have been invaluable in solving many of the problems you will typically encounter in economics (consumer and producer choice, social welfare max, etc.). The third part of the course focuses on dynamics. We start with a look at the relevant results from the theory of differential and difference equations, and then finish by considering dynamic optimization.

Office Hours and Contact Info

Regular office hours are 3:30-4:15 on Tuesday and Thursday and 2:00-4:00 on Wednesday. I am also available immediately after class. I will be happy to make an appointment for another time if that is more convenient. My office is DM 317, my phone number is 348-3287, and my email is <boydj@fiu.edu>.

Class Times

The class meets Tuesday and Thursday from 5:00pm to 6:15pm in GC-289.

Textbooks

• Carl Simon and Lawrence Blume, Mathematics for Economists, W. W. Norton, New York, 1994.

Simon and Blume's book is the main text. I plan to start by covering Parts II-V of Simon and Blume, with some excerpts from Parts VI and VII. Time permitting, we will then turn our attention to dynamic models.

Printable Syllabus

A printable syllabus is available in PDF format. Unlike the web version, the printable syllabus will not be updated during the semester.

Exams and Homework

Grades will be based on two in-class midterm exams (worth 25% each), a final exam (40%), and homework assignments (10%). In addition to being announced in class, homework assignments will be posted on the class web page.

Exams

There will be two midterm exams, each worth 25% of your grade. The first midterm was given on Thursday, October 2. The second midterm was given on Thursday, November 6. The final is scheduled for 3:30pm on Thursday, December 11.

If you want, you can look at some old exams (with answers). The first 2001 midterm, second 2001 midterm, and both the 2001 final are available in pdf (Acrobat) format. The questions (with answers) for the 2002 final are also available.

Answers to Exams

Answers to both Exam #1 and Exam #2 are available.

Homework Assignments and Answers

1. Answers to Problems 2, 3, 7 from Chapter 6 and Problems 6, 12 and 18 from Chapter 7.
2. Answers to Problems 7, 17, 24, 28, 29 from Chapter 8 and Problem 3 from Chapter 9.
3. Answers to Problems 8, 13, 17 from Chapter 9 and Problems 12 and 15 from Chapter 10.
4. Answers to Problems 2, 7, 14, 18, and 21 from Chapter 12.
5. Answers to Problems 25 and 31 from Chapter 12 and Problems 11, 12, and 23 from Chapter 13.
6. Answers to Problems 4 and 14 from Chapter 14 and Problems 1, 6, and 13 from Chapter 15
7. Answers to Problems 1 and 2 from Chapter 16 and 1, 4, 5, and 7 from Chapter 17.

Answers will be posted sometime after the homework is collected.

Schedule of Chapters

Last updated: December 8, 2003